401(K) Rollover to one IRA Then Slipt to Two IRAs
I have a client who just rolled over a 401(k) to one IRA. He wants to split this one IRA into two IRAs, say IRA A and IRA B. Does he have to wait for 12 months before he can do another trustee-to-trustee transfer without violating the IRA transfer rule?
Please advise.
Thank you in advance for your help.
Permalink Submitted by Alan Spross on Mon, 2009-10-12 21:09
No, he does not have to wait. The rollover FROM the 401k to an IRA does not count because the distribution did not come FROM an IRA.
He could create IRA B by indirect rollover if he wants to, but then he would have to wait 12 months before doing another indirect rollover from either A or B. But if he creates IRA B by a direct trustee transfer, then he will not have used the one allowed rollover and would still have an indirect rollover available from either A or B to use if he needed to.