Two IRA Rollovers in 2015

Submitted by Darlene Lukaszewicz on Wed, 2015-09-23 14:12

I just met with a new client and realized they completed TWO 60-day rollovers in 2015. Is there any way to correct the second rollover so it is not taxable?



Submitted by Jose Morales on Wed, 2015-09-23 16:58

were any of the rollovers from an employer sponsored retirement plan to an IRA by chance?



Submitted by Alan - IRA critic on Wed, 2015-09-23 17:02

If each one was an IRA to IRA rollover, there is no way to avoid taxation of the second rollover. And the second rollover would have to be removed from the IRA as an excess contribution. Note that two rollovers are OK as long as there was only one distribution.



Submitted by Darlene Lukaszewicz on Sat, 2015-10-24 15:38

Thanks for getting back to me…I was reading something regarding a workaround…taking one of the IRA rollovers and transfer to Roth ira and the do a conversion back to the IRA???  Was a little confusing.  Not sure if that applies in this case…To clarify, they were TWO IRA accounts at TWO different banks and combined into ONE IRA account at another bank.



Submitted by Alan - IRA critic on Sat, 2015-10-24 17:51

  • The conversion work around only works if the second distribution has not yet been rolled over. It can then be converted and recharacterized back to a TIRA afterwards. It is a way to get the second distribution back into a TIRA. But if both distributions have already been rolled over, the second one was not eligible and will be taxed. There is also an excess IRA contribution that must be removed from the IRA in a corrective distribution.
  • Starting 1/1/2015 the rollover rules changed to limit rollovers to one for all IRA accounts instead of one per account. It no longer matters if two distributions are taken from the same IRA account or from different accounts. Only one can be rolled over within a 12 month period of time. People need to move their IRA funds by direct trustee transfer, not by receiving a distribution check.


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