Roll SIMPLE IRA into Traditional or Rollover IRA?
I have an old SIMPLE IRA that I will no longer be contributing to. I also have a traditional IRA. Would there be an issues with rolling the SIMPLE IRA into the traditional IRA or should I set up a Rollover IRA? Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2014-08-11 16:54
A rollover IRA IS a traditional IRA that only contains rollovers from qualified plans. A Simple IRA is not a qualified plan, so the IRA account that receives the rollover will not be a rollover IRA and therefore you can roll the SIMPLE IRA into your traditional IRA as long as at least two years have passed since the date of your first SIMPLE IRA contribution.
Permalink Submitted by David Sego on Mon, 2014-08-11 18:19
Thanks. Would it make any difference if the traditional IRA was a contributory IRA? Any other issues beyond keeping track of pre-tax and after-tax contributions?
Permalink Submitted by Alan - IRA critic on Mon, 2014-08-11 18:42
OK if the TIRA is contributary and you continue to make either deductible or non deductible contributions. Any basis from Form 8606 is considered to apply across all your owned non Roth IRA accounts, so the rollover of the SIMPLE IRA into the TIRA will not change the basis % you already have over all your non Roth IRAs.