Rollover and Tranfer confusion
I presently have one Traditional CD IRA and 3 Roth CD IRAs listed as separate accounts at the same Credit Union. I also have one traditional CD IRA at one bank and 2 traditional CD IRAs under separate account numbers at a second bank. All 7 accounts are due to expire within the next 365 days.Here is my question — Am I able to rollover all 7 of these accounts on their maturity dates without violating the IRS rules and thereby incurring a penalty. Help by a professional is needed
Permalink Submitted by Alan - IRA critic on Tue, 2013-08-06 01:03
You are entitled to one rollover per IRA account over 12 months. If the account numbers are all in separate IRA accounts, you have no problem. That would mean that you would receive a separate 1099R for each expired CD and have no problem. If any doubt, plan to move the funds by direct trustee transfer as that eliminates all reporting on your return and eliminates the 1099R forms as well.
Permalink Submitted by Clarence Boje on Tue, 2013-08-06 14:34
Thank you very much
Permalink Submitted by Kathleen Burkett on Tue, 2013-08-06 18:23
Client (73) is moving his IRA to new firm. Current custodian distributed the 2013 RMD to the client (no taxes withheld) and delivered balance to new firm. Clients CPA told him to deposit the RMD check into the new IRA in order to keep the money invested in the market until later in December and then request the RMD to be distributed. CPA states that the 60 day rollover rule would allow for this and it would prevent the client from having to pay estimated taxes which would trigger interest charges.I am concerned that this is not permissible –rolling over an RMD. (2 1099r would be produced and conflict with the 1 tax payment) Will this create a problem for the Client?
Permalink Submitted by Alan - IRA critic on Tue, 2013-08-06 19:09
You are correct. Unless client previously satisfied his entire IRA RMD from this or other IRAs he owns, the prior distribution is applied to his RMD and is not eligible for rollover. If client still wants to pay estimates, he could take another distribution from the IRA as late as December equal to his tax underpayment and elect 100% withholding. The withholding will be credited as if paid throughout the year and eliminate any penalties. He could then roll back the funds from other money in January within 60 days which would eliminate the taxable distribution. Again, the prior RMD cannot be rolled back into the IRA.