IRA One-Rollover Per Year Rule

Taxpayer rolls his SIMPLE IRA into a newly established 401(K) plan this year. Taxpayer now wants to roll 401(K) account balance into a Rollover IRA account since the ultimate desire is to self-direct his IRA. Does this violate the new once a year rule?



No. The one rollover limitation only applies to IRA to IRA 60 day rollovers. Neither of these is an IRA to IRA rollover. Further, the 401k to IRA rollover should be done by direct rollover to avoid 20% withhholding anyway. Also, note that the SIMPLE IRA to 401k rollover can only be done after 2 years has passed from the first SIMPLE contribution.

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