counted as rollovers or transfers?
have potential client who withdrew his IRA from two sources and then put them into two bank IRA’s. I don’t know why he did this.
Now he wants me to handle the IRAs. I don’t want to put this money into an investment only to come back and get hit with taxes since he did two rollovers within 1yr.
I know that from the Bank to an investment company they would be listed as a transfer
but…what about the two withdrawals he did and then took out an IRA with the banks.
Are they not listed as rollovers since he received the proceeds and then did the 60 day rule?
or
Since one took out taxes and the other didn’t, would it only be listed as one rollover?
any help?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Wed, 2015-10-14 22:40
There were two different distributions which will be reported on a 1099R for each account, and only one can be rolled over effective 1/1/2015. Any tax withholding is immaterial. If both have been rolled over, the first rollover is allowed, but the second one is not and becomes an excess IRA contribution as well as being taxable. If any of these distributions was done in 2014 before the new rules started 1/1/2015, then there would not be a problem.
Permalink Submitted by Jose Morales on Thu, 2015-10-15 17:16
Why do you assume that “from the Bank to an investment company they would be listed as a transfer”
Permalink Submitted by Douglas Bauerband on Thu, 2015-10-15 17:50
because its already in an IRA at the bank. If we sign him up with an investment company and send the transfer forms to the bank, its a transfer and not a rollover.
Permalink Submitted by Alan - IRA critic on Thu, 2015-10-15 18:58
If a non reportable transfer was done, it would not be counted as a rollover and would not affect any actual distributions that were rolled over due to a check being made out to a taxpayer personally. But if two actual distributions were made within a 12 month period, only one can be rolled over whether there were additional transfers made during this period or not.