60-Day Rollover Question
Does anyone know if the 60 Rollover is effective as of January 1, 2015, when the rule went into effect or is it rectroactive into 2014?
For example if money was taken out of an IRA in August of 2014 and put back in September 2014 and now this same person wants to due another rollover. So does the rolling 12 mo. period start January 1, 2015 or is it retroactive to include last year’s rollover?
Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2015-06-17 21:33
It’s a combination of both. While the aggregate number of rollovers for all IRAs does not count any distributions made before 2015, the prior interpretation of one rollover PER IRA account per 12 months does not become immaterial as of 1/1/2015. Therefore, if a taxpayer wants to do the current rollover from a DIFFERENT IRA account now, there would be no violation. But if the distribution was from the same IRA account as the August, 2014 distribution, the original interpretation of the one rollover rule has been violated. In summary, in the process of tightening the rules starting in 2015, the IRS is not allowing a one time violation of the old rule if the taxpayer did a 2014 rollover from a particular IRA. For this particular taxpayer, they should do a non reportable transfer of the needed amount from the current IRA to a different account, then they can safely do the current rollover from the different account.
Permalink Submitted by Pattie Gradl on Wed, 2015-06-17 22:35
Thank you!