2 IRA transfers within a 12 month period
Hi,
Can you give me more information about the rules of doing more than 1 direct transfer or rollver within a 12 month period? If someone has several different IRAs, and they roll it over into another IRA within a 12 month period, would the second one then be not eligible and cause a tax situation?
Permalink Submitted by Alan - IRA critic on Mon, 2022-12-12 18:17
There are no limits for direct trustee to trustee transfers. The one rollover limit applies to distributions where you receive a check made out to you personally that you wish to roll over. These are called 60 day rollovers or indirect rollovers, and you are only allowed one of these for all your IRAs combined. This limit does not apply to rollovers to an employer plan or to Roth conversions. The limit does apply to rollovers between like kind IRAs only, eg TIRA to TIRA or Roth IRA to Roth IRA. The second such distribution over a 12 month period would not be eligible for rollover to the same type of IRA account.
Permalink Submitted by Carrie Baeten on Tue, 2022-12-13 20:14
Thanks for email. To make sure that I understand, if I was doing an IRA direct transfer from 1 mutual fund company to another where the check was made out directly to the institution more than once in a 12 month period, the second transfer is where the tax issue would come up, correct? Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2022-12-13 20:50
No, direct transfers are unlimited. If the check was made out to the receiving custodian FBO your IRA, there should be no 1099R issued. A 1099R is only issued for distributions, not transfers. If the check was payable to you personally, then you will get a 1099R and be limited to one such distribution over 12 months. So if you get a 1099R on what you think was a direct transfer, something went wrong.