Client has a small Trad IRA with $1,000
We don’t want to add to his annuity. No Roth or other IRA. He just wants to close this account and not be taxed.
Can we transfer the trad ira to his simple ira?
Would that count as any type of conversion?
Would it count as a contribution that his employer would have to contribute (presently not contributing to his simple)?
Thank you,
Douglas
A TIRA can be rolled into a SIMPLE IRA, but only after 2 years from the date of the first SIMPLE IRA contribution. Since client will be cashing out the IRA annuity, this will be a 60 day rollover which is subject to the one rollover limit for 12 months. If this one rollover has already been used up, client will have to wait to take the TIRA distribution. This would just be a rollover, it is not a conversion and would not count as a current year SIMPLE IRA contribution. If for some reason the SIMPLE IRA custodian would not accept a rollover, client will have to make the rollover contribution to a new TIRA account.
Permalink Submitted by William Tuttle on Wed, 2021-01-27 18:55
Just because you can do something, does not mean you should do something. Often it is best to do nothing.