What is a Rollover and how does it happen?
A Rollover occurs when an individual requests a distribution from an IRA or a Qualified Retirement Plan and then “rolls” the assets into an IRA. There are three types of rollovers: (a) an IRA rollover; (b) a Qualified Retirement Plan Rollover, and (c) a Qualified Retirement Plan Direct Rollover. Under federal tax law, each IRA owner is limited to one IRA Rollover in a 12-month period. On the other hand, Qualified Retirement Plan Direct Rollovers are not treated as rollovers subject to this 12-month rollover rule. • IRA Rolover – Occurs when an individual has taken a distribution personally from his/her IRA. The IRA owner has 60 days to rollover the distribution into another IRA. If the funds are not put into another IRA account, the individual shall be subject to an additional penalty tax of 10%. • Qualified Retirement Plan Rollover – Occurs when an individual takes personal possession of his/her distributions from a qualified retirement plan. The QRP rollover is a more complex procedu
