Traditional and Roth Rollover or Conversion
A client has both a traditional and Roth IRA and would like to do a 60 day rollover from both. Would his IRAs be aggregated for rollover purposes therefore only allowing a rollover from one of them within 12 months? If he takes a distribution from the traditional ira, how long does he have to put that money into his Roth IRA to count as a conversion?
Permalink Submitted by Alan - IRA critic on Sun, 2023-08-27 14:58
Only one rollover in a 12 month period is allowed between like kind IRA accounts, however conversions are not beween like kind accounts and do not count. An indirect rollover conversion must be completed within 60 days of receiving the traditional IRA distribution. In particular, if a change of like kind IRAs is intended it should be done by direct transfer to avoid counting as a rollover subject to the limit.
Permalink Submitted by damon focaracci on Mon, 2023-08-28 14:53
In this scenario, would the Traditional IRA and Roth IRA be considered “Like kind IRA Accounts” or would they be treated seperately for rollover rules?
Permalink Submitted by Alan - IRA critic on Mon, 2023-08-28 15:16
They are not treated separately with respect to the one rollover limit. Within the 12 month period if a TIRA is rolled over to a TIRA, a Roth IRA cannot be and vice versa. But when a TIRA is rolled to a Roth IRA (conversion), this does not count because they are not like kind IRAs. SEP and SIMPLE IRAs are both treated as traditional IRAs for this purpose. Also, a rollover from a TIRA to a non IRA employer plan does not count since the employer plan is not an IRA.