Does a rollover need to go into a ‘Rollover IRA’ or can it go into a ‘Traditional IRA’

Submitted by Perry Piazza on Mon, 2017-11-06 21:29

Hi all – great board and it has helped me in the past. Thanks in advance…

I have a client with a roughly $550k Traditional IRA that I managed (i.e. titled: John Doe, Traditional IRA). After 25 years he is exiting an LP as the single manager of the LP is retiring. This is IRA money and they will cut him a check for $300k ish. He’d like to roll it to me so we have the 60 day rule. Can we just deposit it in the Traditional or is a Rollover title needed?



Submitted by Alan - IRA critic on Mon, 2017-11-06 23:15

  • Since the LP was in an IRA, why isn’t the termination check made payable to the IRA custodian for his benefit, instead of directly to him? Either way, he can roll the proceeds over any other IRA, but it would not be a rollover IRA since a rollover IRA comes from a rollover from an employer plan.
  • If the LP check was paid to his current IRA custodian, a trustee to trustee transfer to the IRA you manage could be done, at that would save his one allowed 60 day rollover. In fact, if he did a 60 day rollover in the past 12 months, he does not have a rollover available now and an IRA check payable to him would be devastating because he could not roll it over. I would look into why this check is being sent directly to him since this practice could be disastrous for IRA owners that do not have a 60 day rollover available to them now.

Submitted by Perry Piazza on Tue, 2017-11-07 18:16

That helps. I will advise to have the check made out to the IRA custodian.Thanks very much.

Add new comment

Log in or register to post comments