An IRA rollover occurs when a taxpayer receives a distribution from one IRA and within
60 days deposits the assets into another IRA. This transfer to the receiving IRA is
called a rollover contribution. Any portion of the distribution not rolled over
within 60 days is taxed on the date it was received, not on the 60th day after the
Generally, if any part of a distribution from an IRA is rolled over tax-free to
another IRA, you must wait one year before you can make another tax-free rollover.
Before 2015, the one-rollover-per-year rule applied on a per-IRA basis. Starting in
2015, the one-rollover-per-year rule applies to an individual's IRAs in the aggregate
(rather than on a per-IRA basis). Thus, from now on, individuals who withdraw IRA
funds and roll them over tax-free to another IRA can't withdraw funds from any other
IRA during the following 12 months and complete another tax-free rollover. A 2014
distribution properly rolled over in 2015 will not count toward the new
one-rollover-per-year rule that's effective starting in 2015.
Trustee-to-trustee transfers are preferable because they are not subject to the
one-year waiting period that applies to rollovers to and from IRAs. Also, since the
IRA owner never takes possession of the assets, there is no danger that the
distribution will be taxed because it is not rolled over within the required 60-day
Roth IRAs and traditional IRAs are basically subject to the same rollover rules.
However, a Roth IRA can only be rolled over to another Roth IRA. A traditional IRA
can be rolled over to a Roth IRA, but it is taxable as if it were not rolled over.
This publication is distributed with the understanding that the author, publisher and
distributor are not rendering legal, accounting or other professional advice or
opinions on specific facts or matters, and, accordingly, assume no liability
whatsoever in connection with its use. The information contained in this newsletter
was not intended or written to be used and cannot be used for the purpose of (1)
avoiding tax-related penalties prescribed by the Internal Revenue Code or (2)
promoting or marketing any tax-related matter addressed herein. © 2015