Transferring IRA assets
My brokerage company currently holds a 401k plan from my previous employer. I also have a rollover IRA with the same brokerage company that was created from another company I was previously employed. Can I transfer both plan’s assets to a rollover IRA with another brokerage company without tax implications. I keep being warned about the tax implication with commingled funds but I just don’t see how this would be commingling? Any thoughts? Thanks in advance
Permalink Submitted by Alan Spross on Tue, 2008-04-01 22:51
You can do a direct rollover of each plan into the same IRA account. There are no commingling issues except that if you were to roll over the plans into an existing IRA account that you have made regular contributions to, your unlimited creditor protection in bankruptcy could be made subject to the 1,000,000 limit. Note that if you have any highly appreciated employer stock in either plan, any NUA potential is forfeited when the assets land in an IRA.
If there are any after tax contributions in either plan, you can roll them over also, but would need to file Form 8606 if you did.