In the case of an IRA-to-IRA rollover, how can the rollover be accomplished?
This can be done either as a direct rollover or an indirect rollover, just as a rollover from an employer-sponsored plan. Either method results in a tax-free transfer of the funds from one IRA to another IRA. Since the mandatory withholding rules do not apply to IRA distributions, that is not a factor for choosing one method or the other. The main difference is that, in the case of an indirect rollover (i.e., a rollover in which the funds are distributed from an IRA to the IRA owner who then has 60 days to transfer them to another IRA), such a rollover is limited, for each IRA owned by the IRA owner, to one such indirect rollover in any one-year period. If an individual owns more than one IRA, a tax-free indirect rollover from one IRA will not prevent another tax-free indirect rollover from a different IRA within that one-year period. The key point is that the one-rollover-per-year rule does not apply to direct rollovers (i.e., direct transfers from one IRA custodian or annuity issuer
Related Questions
- How is the 5-taxable-year period calculated in the case of a rollover of a distribution from a designated Roth account maintained under a section 401(k) or 403(b) plan to a Roth IRA?
- What is the difference between an IRA-to-IRA rollover and an IRA-to-IRA transfer?
- In the case of an IRA-to-IRA rollover, how can the rollover be accomplished?
