IRA Rollover
Can an individual rollover an IRA, move the money to a personal checking account, then write a partial check to a new IRA within 60 days and then write another check for the balance, within 60 days, to the same new IRA?
Can an individual rollover an IRA, move the money to a personal checking account, then write a partial check to a new IRA within 60 days and then write another check for the balance, within 60 days, to the same new IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2014-02-07 22:06
Yes. The one rollover rule is based on the distribution, not the rollover contribution. Since this was a single distribution it can be rolled over in as many portions as desired if all within 60 days.
Permalink Submitted by Anthony Zalesky on Sun, 2014-02-09 16:36
Thank you
Permalink Submitted by Calvin W. Gage on Sat, 2014-02-08 04:50
In December 2013, my IRA portfolio manager mistakenly took a distribution from my IRA and transferred it to a non-IRA portfolio. A few days later, still in December 2013, after I discovered this error, the manager transferred the money back into the IRA. Now I have received a 1099-R showing the withdrawal from the IRA, but without indicating the restoration of those funds to the IRA. The portfolio manager advises that they will issue a form 5498 at the end of May — a few weeks after I will have filed my 2013 tax return. I am at a loss to know how to avoid paying a tax on the erroneous distribution. I have searched through my 8 years of “Ed Slott’s IRA Advisor” and two of Ed Slott’s books — as well as the Internet — to find an answer — without success. Perhaps this is an issue to address in a future “IRA Advisor.”
Permalink Submitted by Alan - IRA critic on Sat, 2014-02-08 18:05
This is not a problem. Just report the rollover on line 15a and 15b of Form 1040. Show nothing on 15b and enter “rollover” next to 15b. Both you and the IRS will receive a 5498 in late May indicating receipt of a rollover contribution. The IRS knows not to match up IRA distributions with contributions until much later. If you had rolled it back in January, 2014 the 5498 would not be issued until May, 2015. Note that since this used up your one rollover per 12 month period, you cannot roll another distribution from the IRA account until 12 months from the date of the Dec 2013 distribution.