Roth Account Transfer
Our 41-year-old client, who has a good understanding of financial processes, is interested in moving her Roth IRA account from Fidelity Investments to a Multi-Year Guaranteed Annuity with an insurance company. She is considering asking Fidelity for a check covering all her funds and then endorsing it over to the insurance company. It’s our understanding that this transfer will be considered qualified as long as the insurance company receives the check within 60 days.
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-19 20:37
That would be a 60 day rollover, and only one such rollover between IRA accounts can be done in a 12 month period. There will be a 1099R issued by Fidelity and she will have to report the distribution and rollover on Form 1040, lines 4a and 4b.
Conversely, if she had the insurance company initiate a direct transfer from Fidelity, there would be no 1099R and no tax reporting for her, and the direct transfer would also not use up the one allowed rollover. She should be sure that the IRA opened with the insurance company is a Roth IRA annuity.