2 IRA CD's in Bank rolled over - Ed Slott and Company, LLC

Submitted by Douglas Bauerband on Tue, 2018-12-18 21:21

Client has two IRA CD’s and bank – Traditional IRA’s. Both CD’s renew 12-18-18

The bank gave us the wrong address and fax number to send transfer forms to them, twice.

If she goes into the bank and asks for checks on both IRA’s made out to her:

a. she can only rollover one of them per year, correct?

b. can she take both checks and rollover one now and then one in 2019?

c. She can rollover both since it was from the same bank?

Thank you
Douglas

Permalink Submitted by Alan - IRA critic on Wed, 2018-12-19 00:45

Even if the distributions were on the same day, if they are coming from two different IRA accounts, the IRS would treat this as two distributions, and only one eligible for rollover. But if these two CDs are part of the same IRA account, then there could be only one distribution and only one 1099R.
If two IRA accounts, only one can be rolled over regardless of the year since the number of allowed rollovers is actually measured by the number of distributions, and there will be two distributions.
No, same custodian does not matter. It is the number of IRA distributions that matter. And having a distribution from two different accounts is considered two distributions even when issued the same day. In addition, if there was only one account but two checks issued one for each CD, a new custodian may not accept two checks, thinking that meant there was two distributions.
Brokered CDs present an alternative to this bank transfer problem since there is only ONE brokerage account that can hold many different CDs. When they mature the money is paid into the same brokerage account and there is no 1099R or distribution reported. Replacement CDs are then purchased in the same brokerage account. Typically these CDs are FDIC insured, but if not held to maturity must be sold on the secondary market like a bond.

2 IRA CD’s in Bank rolled over