Rollovers and consolidation

Submitted by Jeffrey Neu on Wed, 2017-11-15 17:13

I just turned 62. I would like to transfer the funds in my first TIRA from a growth fund to something more conservative, keeping all funds in the same TIRA. Then rollover a second TIRA into the first TIRA, followed by rolling over three 401k accounts from previous employers into the first TIRA. All of this would be done with direct transfers from trustee to trustee. Is this permitted without penalty or taxation? Are there any concerns I should know about?



Submitted by Alan - IRA critic on Wed, 2017-11-15 19:04

  • No issues as long as everything is done by direct transfer (IRA to IRA) or direct rollover (401k to IRA). In fact, the ONLY transaction you mentioned which would count against the one rollover limitation is the IRA to IRA transaction if you were to receive a distribution. The 401k to IRA would not count no matter how you did it because there is a non IRA account on one end of the transaction. The change of investments in IRA 1 is not reported and has no tax impact either.
  • The IRA to IRA direct transfer is not reported on a 1099R and you do not report it on your tax return.
  • The 401k to IRA direct rollover IS reported on a 1099R, and you have to report it on lines 16a and 16b of Form 1040. But no tax is due.

Submitted by Jeffrey Neu on Wed, 2017-11-15 19:23

Thank you very much for your advice. It is greatly appreciated.

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