Trustee to Trustee Transfer with a check
I know there is a rule which states that a person can receive a check from the financial institution and still have it qualify as a direct (trustee to trustee transfer).
If it is made out as follows: American Funds, Trustee F/B/O Jane Smith IRA. I need to know where the regulation is located. I checked IRS Pub 590. I did not see it there.
Can anyone tell me if it is in pub 590, or what reg it is in?
Thanks,
Ed Lustberg
Permalink Submitted by Alan Spross on Tue, 2008-01-29 00:45
Ed,
Att’d pasted Q&A 4 of IRS Reg. 1.401a(31):
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Q–4: Is providing a distributee with a
check for delivery to an eligible retirement
plan a reasonable means of accomplishing
a direct rollover?
A–4: Providing the distributee with a
check and instructing the distributee
to deliver the check to the eligible retirement
plan is a reasonable means of
direct payment, provided that the
check is made payable as follows:
[Name of the trustee] as trustee of
[name of the eligible retirement plan].
For example, if the name of the eligible
retirement plan is ‘‘Individual Retirement
Account of John Q. Smith,’’ and
the name of the trustee is ‘‘ABC
Bank,’’ the payee line of a check would
read ‘‘ABC Bank as trustee of Individual
Retirement Account of John Q.
Smith.’’ Unless the name of the distributee
is included in the name of the
eligible retirement plan, the check also
must indicate that it is for the benefit
of the distributee. If the eligible retirement
plan is not an individual retirement
account or an individual retirement
annuity, the payee line of the
check need not identify the trustee by
name. For example, the payee line of a
check for the benefit of distributee
Jane Doe might read, ‘‘Trustee of XYZ
Corporation Savings Plan FBO Jane
Doe.’’
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Permalink Submitted by Edward Lustberg on Tue, 2008-01-29 00:51
Thanks Alan!