Transferring funds from one account to another in the same institution
Hello.
I have 3 different IRA CDs with the same credit union. They recently increased their interest rate and I want to redeem them and move them to new CDs within that credit union. Is this considered reportable or taxable activity? I never will not take possession of the funds for these transactions. Thanks.
Gary
Permalink Submitted by Alan - IRA critic on Fri, 2022-11-25 14:53
Determine up front that these transfers will not only be directly between accounts, but that there will be NO 1099R issued because of the one rollover limitation. Make sure you talk to someone knowledgeable because many banks and CUs are clueless regarding IRS rules. The point here is that if they mess up, you cannot appeal to the IRS because for purposes of this particular rule, the IRS has no authority to waive it due to institution error or any other reason. Finally, remember to factor in the amount of your early redemption penalty and the length of the remaining terms in making your decision.