rollover vs transfer
AM I correct in stating:
A. rollover is only when the client receives the money from his qualified account, cashes it and then can take up to 60 days to rollover the money, Am I correct?
B. If the 401k company, Bank CD’s, 403b company and so on, forward the money directly to the new company or sends a check to the client made payable to the new company, FBO…this is not considered a rollover, am I correct?
C. so if a client has 4 Roth IRA CD’s and we sent in transfer forms for each CD, then this would not be considered a rollover and the 4 are okay to transfer over, am I correct?
Thank you,
Douglas
Permalink Submitted by Jose Morales on Tue, 2015-09-01 00:49
Rollovers can occur after a distribution from an employer sponsored plan or from an IRA. A direct rollover from an employer sponsored plan such as a 401K is reportable but not subject to the “1 per 12 month” limitation. A rollover from an IRA is subject to the “1 per 12 month” limitation. A transfer is not reportable at all, but can only occur betweeen IRAs. The best way to have a transfer done is by having the new IRA Custodian request the transfer from the current IRA Custodian, although technically the IRA owner can request a check payable to the new IRA Custodian “FBO” the IRA Owner (note that many IRA Custodians will not process a transfer this way and are under no obligation to accept a transfer request from anyone other than another IRA Custodian).