60 day rollover from different funds within same IRA acc number
IRA distribution taken from a growth fund and a money market fund within the same IRA account number.
Money was put back into same account and funds within 60 day period.
Two 1099-R’s was issued by the Fund Company. Tax accountant says that violated the one rollover per year rule.
I read it as IRA account viewed as a single IRA no matter how many mutual funds were in it.
Permalink Submitted by Alan - IRA critic on Tue, 2018-03-27 17:19
The two 1099Rs suggests that the fund company set this up as two different IRA accounts, possibly showing different account numbers on the bottom of each 1099R. There is no other reason to have issued two forms. If in error, the fund company needs to issue a corrected 1099R for the total amount since the IRS is going to look at this as the tax accountant stated. The fund company also should not have accepted the second amount rolled back, but they apparently did and appear oblivious to the one rollover limit. Technically, the amount of the second 1099R to be rolled back is taxable, subject to penalty, and an excess regular contribution to that IRA that must be removed with allocated earnings. This fund company has an account structure that is going to cause clients and themselves some real problems if there is confusion between what is a fund number and what is an IRA account number.
Permalink Submitted by Joe Wilson on Tue, 2018-03-27 19:51
The Fund Company shows the same account number on the 1099 forms. It is one IRA. The Fund company, one of the Big 4…says thats the way they do it since they keep track of things on the fund level. I will get back to them again. Meanwhile the accountant said to me..pick which one you want to be the 60 day rollover, obviously we say the higher amount. Interesting thing is that nobody would catch this since everyone is happy but the client pays more taxes!
Permalink Submitted by Alan - IRA critic on Tue, 2018-03-27 20:22
If the account number is the same on both 1099R forms, and if the transaction statements show the same date of distribution, then I would ask the accountant to report them both as rollovers and offer to sign a statement that you are responsible for any fallout from this decision. If the IRA later disagrees with this, you can take it up with them, but keep a copy of the statement for documentation and any documentation you may have to show it was a single request. Similarly, if you requested a single distribution, but the fund distributed the amounts a day or two apart, you should also treat as a single distribution. The IRS has apparently not been active at all regarding enforcement of the one rollover rule, and that may be due to the fact they have no authority to waive the rule in the event of a justified exception.