Roth Conversion, Pro-Rata Rule, and Rollovers: Today’s Q&A Mailbag
This week's Slott Report Mailbag answers readers' questions about Roth conversions, the pro-rata rule, and rollovers.
rollovers
SEPP, SPIA, Rollovers, and 72(t): Today’s Q&A Mailbag
This week's Slott Report Mailbag answers readers' questions about the tax consequences of substantially equal period payments and rolling a 401(k) into a single premium immediate annuity IRA.
The Once-Per-Year Rollover Rule – What Doesn’t Count
In 2014, the Tax Court ruled that an IRA owner could do only one, IRA-to-IRA or Roth IRA-to-Roth IRA, 60-day rollover in a 12 month period. This rule applies no matter how many IRA and/or Roth IRA accounts the IRA owner might have. The 12 months is a full 12 months, not a calendar year. The 12 month period will start with the date that IRA or Roth IRA funds are received.
Roth IRAs – Favored for Annual Contributions, Neglected for Rollovers from Company Plans
Roth IRAs become 20 years old in January of 2018 and now hold more than $660 billion in retirement wealth, reports the Investment Company Institute. Yet while Roth IRAs have become very popular among individuals who make annual contributions to IRAs, they are near totally avoided by persons who roll over big-dollar distributions from company retirement plans into their IRAs, with these funds going overwhelmingly into Traditional IRAs.
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