60 day rollover put back to 2 different accounts – problem
if earlier in the year someone did an IRA transfer (trustee to trustee transfer – moved their IRA from schwab to Fidelity).
Then later in the year they did a single distributions (60 day rollover) from their new fidelity IRA to 2 different IRA custodians (i.e. particular investments they couldn’t hold at schwab or fidelity). The 2 deposits at the different custodians were deposited on different days, but all within the 60 days rollover time period. My understanding is that this scenario is just fine as they only did one 60 day rollver (ie the same money only moved 1x, it was just re-deposited 2 different places). For 60 day rollover rules the initial trustee to trustee (direct transfer) doesn’t count / doesn’t matter correct?
Said another way: someone was doing a 60 day rollover (from IRA #1 as an example) of $100,000 but in putting that money back into IRAs they deposit it into 2 new accounts (IRA #2 and IRA#3) for example. even if the deposits didn’t take place on the exact same day, so long as it was all done within 60 days does this meet the 60 day rules?
Permalink Submitted by Alan - IRA critic on Thu, 2022-08-04 20:27
Yes, this is allowable. The one rollover limitation is determined by the distribution. A single distribution can be rolled over to any number of new destinations as long as there was just a single distribution. Conversely, if there had been two distributions, only one of them could be rolled over.
Permalink Submitted by Michael Neuenschwander on Thu, 2022-08-04 20:52
ie the distribution from the IRA was on the same day but they wrote checks from their IRA to the new custodians, would the 2 seperate checks cause this to be viewed as 2 rollovers and thus only one can be rolled over? or the fact that it was done on the same day as part of the same transaction apply?
Permalink Submitted by Alan - IRA critic on Thu, 2022-08-04 21:29
The IRS has not been clear about this either for custodian issued checks or checks written by the IRA owner with checkwriting authority. While it would have been safer to write one check for deposit to their checking account and then write two checks from the checking account, I would still be inclined to treat this as a single distribution from the IRA and report rollovers of that distribution.