Consolidation after 60 day rollover
I have a client who took a rollover from his IRA to pay some expenses. Within 60 days, the money was put back in the account. It is now a month later and he has two qualified plans that he would now like to consolidate into that same IRA (from which recent IRA rollvoer was taken) via rollovers. I know that qualified plan rollovers do not count towards the once per year limit but I was curious if these rollovers create any issues considering he is rolling them to the account from which an IRA rollover was recently done…. Does anyone see any issue here? Thanks in advance for your help!
Permalink Submitted by Alan Spross on Wed, 2011-01-19 16:57
The only factor to be considered here is whether the new money in this IRA will result in the need to do another indirect rollover before the 12 month waiting period is up. From prior posts made here, it appears that many people who need these 60 day rollovers to pay bills need to do more than one. Accordingly, many create additional IRA accounts by direct transfer so they can do more than one rollover in total for a 12 month period.
An unrelated consideration is whether the client has a need to continue unlimited creditor protection under the federal BK law instead of the 1mm limit. If so, the QRP rollovers should be made to a new IRA account and not commingled with contributary IRA accounts.
Permalink Submitted by John Boardman on Thu, 2011-01-20 15:02
I agree with your thoughts. He is not someone who has ever done this or that I ever see needing one again; it was a very unique situation.