Transfer of Traditional IRA into a SEP-IRA
I have a client who has a traditional IRA at a local financial institution in a Certificate of Deposit. It is up for renewal and the client wants to “transfer” it to an existing SEP-IRA. Is this permissable? If you answer yes, could you please cite the IRC reg or code as I am having a difficult time locating it.
Thank you in advance.
Respectfully yours,
Bernard A. Fagnani CPA/PFS
Permalink Submitted by Jose Morales on Wed, 2011-04-06 18:16
A SEP IRA is really just a Traditional IRA that receives SEP contributions. Once the SEP contributions have been made they are treated as if they were Traditional IRA contributions from day 1. Therefore, you are really trying to transfer traditional IRA funds to another traditional IRA.
Permalink Submitted by Alan Spross on Wed, 2011-04-06 19:00
Here is the rollover portability chart. You can see that a SEP and TIRA are listed in the same category on the chart and this shows that rollovers either way can be completed.
http://www.mhco.com/Library/Articles/2008/ARoll_Chart_011008.html