IRA rollover
Client wants to withdraw IRA funds in a check payable to herself. She then wants to rollover the funds by
sending all of the withdrawal to [u]two other separate [/u]IRA accounts. This will be the only withdrawal made this year. 100% of the original withdrawal will be sent to the two new IRA accounts within 60 days.
Does this qualify as a nontaxable rollover – her 1 allowed annually.
Permalink Submitted by Anonymous (not verified) on Fri, 2009-02-20 03:04
John,
This is quite OK since each IRA account has only been inpacted once. However, the new ones as well as the original account, if it still has a balance, have now used up the one permitted rollover within a running 12 month period. And we are assuming here that the prior 12 months were clear of rollovers as well. For the upcoming 12 months, transfers need to be done directly instead of by rollover.
Permalink Submitted by Anonymous (not verified) on Sat, 2009-02-21 14:16
Hi Alan,
Just so i understand,
The receiving IRAs are only allowed the one rollover per rolling 12 month period, correct? So if i wanted to R/O from another IRA i would have to contribute this rollover to an IRA that has not had R/O funds added to it previous 12 month. Also, rule of thumb, QRP money is never subject to the one rollover per 365, correct? Only if IRA money.
One more question, 😉 if i rollover my Roth 401K which is partially funded with pre-tax contributions from my employer into a Roth IRA it will be a taxable event on that portion, am i correct?
Thanks
IRA Rookie
Permalink Submitted by mk foss on Sat, 2009-02-21 20:39
The untaxed portion of your 401k will be taxable when you make a Roth conversion. That would be employer contributions, your pre-tax contributions and earnings on all contributions (including earnings on your post-tax contributions).