60 day rollover rule to 401k, IRA, or Roth

Submitted by Julie Brangenberg on Wed, 2019-06-19 18:39

Hello. Client distributed 3 bank account IRA’s (CD’s – Contributory). Two were from one bank and one from another bank. Can she do any of the following 60 day rollovers:

To her 401k (she’s retired, but 401k is still with her Employer)
To a new IRA with another custodian
To a new Roth IRA with another custodian

and guess what – the deadline is tomorrow… Thanks.

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Permalink Submitted by Alan - IRA critic on Wed, 2019-06-19 19:31

The money could be rolled to the 401k, however few 401k plans will accept rollovers from retirees.
Only one distribution could be rolled to a TIRA due to the one rollover limit for 12 months
Rollovers to a Roth IRA (conversions) can be done without limit. Either same or new custodian. I assume none of these CDs were Roth CDs. Since client will be taxed on two of these distributions anyway, converting two would be preferable to that.
Were the two at one bank distributed on the same day?
Note that the 60 day deadline starts when the client received the proceeds, so if they were mailed the 60 days starts later than if client picked up the check at the bank.
Perhaps the best solution is to roll the largest distribution to a TIRA, and the other two to a Roth IRA, but this assumes that no 60 day rollover was done in the last 12 months as that would eliminate the TIRA rollover.

Permalink Submitted by Julie Brangenberg on Wed, 2019-06-19 20:00

The two IRA distributions from the same bank were probably done on the same day.

Permalink Submitted by Julie Brangenberg on Wed, 2019-06-19 20:27

It sounds like the 401k Plan does allow for IRA Rollovers (don’t know yet about 60 day rollover from personal check). So that may take care of one of the IRA’s. Do you think it is possible to roll the other 2 into her Roth bucket in her 401k, and treat it like a conversion?

Permalink Submitted by Julie Brangenberg on Wed, 2019-06-19 20:27

Permalink Submitted by Julie Brangenberg on Wed, 2019-06-19 20:47

How much of a grace period does the IRS allow for mailing, and does the participant have to show proof of delivery date? Thanks.

Permalink Submitted by Alan - IRA critic on Wed, 2019-06-19 21:27

If the 401k plan will accept the rollovers, all 3 of them can be rolled there. But how can this be determined before the 60 days runs out? The one rollover rule only applies to IRA to IRA of the same type 60 day rollovers, so as long as a qualified plan is either the distributing or the receiving plan, there is no one rollover limit. If the plan will accept the rollovers, they would probably do so whether a personal check was sent or a direct rollover check. The rollover must go into the pre tax portion, cannot go into the Roth 401k portion, but does not need to in this case.
If one bank issued two distributions on the same day, it is treated as a single distribution if from the same account, but each CD is probably had a separate account number and therefore would still be treated as two distribution in this case, even if done the same day.

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60 day rollover rule to 401k, IRA, or Roth

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