IRA Rollover Rules Revised

Due to a recent tax court ruling, the IRS has revised its IRA rollover rule. Beginning January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.

The one-per year limit does not apply to:

  • Rollovers from traditional IRAs to Roth IRAs (conversions)
  • Trustee-to-trustee transfers to another IRA
  • IRA-to-plan rollovers
  • Plan-to-IRA rollovers
  • Plan-to-plan rollovers

Once this rule takes effect, the tax consequences are:

  • You must include in gross income any previously untaxed amounts distributed from an IRA if you made an IRA-to-IRA rollover (other than a rollover from a traditional IRA to a Roth IRA) in the preceding 12 months, and
  • You may be subject to the 10% early withdrawal tax on the amount you include in gross income.

See your tax advisor for complete details.

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