IRA rollover vs. trustee to trustee transfer

Submitted by ellen dawmdellipizzi on Thu, 2023-03-30 12:51

I took IRA funds from an IRA account at Schwab and moved them to a new IRA account at Fidelity. The rep who opened my account titled it a “RolloverIRA”. I wanted them to do a “trustee to trustee” transfer. They refused and said it had to be titled an IRA rollover. Is this the same? I wanted a hassle free movement of the IRA funds from one institution to another .



Submitted by Alan - IRA critic on Thu, 2023-03-30 15:59

  • The title of the account is irrelevant to the method used to move the funds. If you never received a distribution check from Schwab, most likely the funds moved by direct trustee transfer. You would not receive a 1099R, not would Fidelity issue a 5498 reporting a rollover contribution.
  • The term “rollover IRA” should only be used for IRA accounts that are funded exclusively by rollovers from qualified plans. FIdelity’s registration of a “Rollover IRA” has no bearing on the method used to fund the account. Fidelity probably has no idea where the funds in your Schwab IRA came from. Was your Schwab account titled as a “rollover IRA”?
  • If the account at Schwab was never a true rollover IRA, perhaps being funded in part by your regular contributions (or regular contributions to a custodian before Schwab rolled to Schwab), there is no downside to FIdelity showing it as a “rollover IRA”.  Whether it is really a rollover IRA would be determined by investigating the source of funds, not by a title applied by an IRA custodian. Such custodians are notoriously sloppy and inconsistent with respect to applying the “rollover” tag.
  • Again, the funds most likely moved by direct transfer if you never received a distribution check.


Add new comment

Log in or register to post comments