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IRS rules ONE rollover per year
Old 04-04-2014, 07:56 AM   #1
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IRS rules ONE rollover per year

IRA rollover ruling stuns advisers and savers - Robert Powell - MarketWatch

Anyone else here this? Ouch!
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Old 04-04-2014, 08:55 AM   #2
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That's pretty interesting.

I think the one key here is that trustee-to-trustee "rollovers" are not included in this. Hence if you need to move your IRA from one trustee to another, this isn't a problem as long as you let them do it.

The problem comes if they cut a check and then you do the rollover.
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Old 04-04-2014, 09:17 AM   #3
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Agreed the trustee to trustee rollovers are still unlimited since you never see the funds (and likely no check is cut just an electronic funds transfer) as well as no 1099s to putz with at tax time. Why anyone would use the other method is beyond me.
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Old 04-04-2014, 09:19 AM   #4
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That's pretty interesting.

I think the one key here is that trustee-to-trustee "rollovers" are not included in this. Hence if you need to move your IRA from one trustee to another, this isn't a problem as long as you let them do it.

The problem comes if they cut a check and then you do the rollover.
Agreed- as I read it, if you touch it, one per year is the limit.
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Old 04-04-2014, 09:54 AM   #5
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Agreed the trustee to trustee rollovers are still unlimited since you never see the funds (and likely no check is cut just an electronic funds transfer) as well as no 1099s to putz with at tax time. Why anyone would use the other method is beyond me.
I've never done a direct rollover in the past because the going-from institution often charged a $25-35 fee for cutting the check to the going-to institution whether I picked up the check or they mailed it or the other institution requested it. If I picked up the check made out to me it was free and the timing was under my control.....pick up check same/next day and then mail....
so I guess the game changes for me since the terms and conditions for exit don't always coincide with good rates,etc.
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Old 04-04-2014, 12:01 PM   #6
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I've never done a direct rollover in the past because the going-from institution often charged a $25-35 fee for cutting the check to the going-to institution whether I picked up the check or they mailed it or the other institution requested it. If I picked up the check made out to me it was free and the timing was under my control.....pick up check same/next day and then mail....
so I guess the game changes for me since the terms and conditions for exit don't always coincide with good rates,etc.
The $30 dollars may save you $3000 later. It just may be worth it now...
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Old 04-05-2014, 10:41 AM   #7
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Plus, direct rollovers of IRA to IRA don't get reported. Indirect rollovers have to be reported even if there is no tax consequence.
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Old 04-06-2014, 07:53 AM   #8
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I was under the impression that you could do an IRA rollover once per year, whether it be a transfer or otherwise. I recently did a "transfer" of my IRA from a local bank to Vanguard Wellesley Admiral. Funds were wired between those institutions. Some statements being made sound like I can now move those IRA funds around whenever I want within Vanguard so long as I don't touch the money. Doesn't sound right to me.
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Old 04-06-2014, 08:26 AM   #9
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I was under the impression that you could do an IRA rollover once per year, whether it be a transfer or otherwise. I recently did a "transfer" of my IRA from a local bank to Vanguard Wellesley Admiral. Funds were wired between those institutions. Some statements being made sound like I can now move those IRA funds around whenever I want within Vanguard so long as I don't touch the money. Doesn't sound right to me.
If you are talking changing investments in the IRA you can do that as often as you like (or the custodian allows). The issue is changing custodians. For example you might move money from one fund at vanguard to another any time you like (subject to vanguards time limits on some funds).
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Old 04-06-2014, 08:56 AM   #10
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I was under the impression that you could do an IRA rollover once per year, whether it be a transfer or otherwise.
need to use the lingo more precisely or there can be misunderstandings......I thing if you do a real transfer w/o you touching the money, you can do anything, anywhere, unlimited no. of times. Rollovers are the issue where you need to be more careful.
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Old 04-06-2014, 09:20 AM   #11
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Just to be more clear, it was the courts who ruled....
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Old 04-06-2014, 10:06 AM   #12
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Agreed the trustee to trustee rollovers are still unlimited since you never see the funds (and likely no check is cut just an electronic funds transfer) as well as no 1099s to putz with at tax time. Why anyone would use the other method is beyond me.
I am lead to understand people were doing some sort of wacky leverage strategy with rollovers. Seems odd to me, but then again people buy variable annuities, too.
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Old 04-06-2014, 10:11 AM   #13
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Makes you wonder about the IRS publications as the court ruling is in direct conflict with the examples in their Pub 590. However it looks like the court is correct based on the actual tax code. The limitation in (B) says 1 rollover per 12 month period.

26 U.S. Code 408 - Individual retirement accounts | LII / Legal Information Institute

(B) Limitation
This paragraph does not apply to any amount described in subparagraph (A)(i) received by an individual from an individual retirement account or individual retirement annuity if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in that subparagraph from an individual retirement account or an individual retirement annuity which was not includible in his gross income because of the application of this paragraph.
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Old 04-06-2014, 10:55 AM   #14
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Originally Posted by kaneohe View Post
I've never done a direct rollover in the past because the going-from institution often charged a $25-35 fee for cutting the check to the going-to institution whether I picked up the check or they mailed it or the other institution requested it. If I picked up the check made out to me it was free and the timing was under my control.....pick up check same/next day and then mail....
so I guess the game changes for me since the terms and conditions for exit don't always coincide with good rates,etc.
If they send you a check made out to the financial institution holding your rollover IRA then that counts as a direct rollover as it never touches your personal taxable account(s).

When I did my 401k Rollover I wanted it to be institution to institution but my 401k provider didn't allow that, so Vanguard opened an IRA Rollover account ahead of time, and told me how the check should be made out, which I then requested from the 401k provider.
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Old 04-06-2014, 06:01 PM   #15
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If they send you a check made out to the financial institution holding your rollover IRA then that counts as a direct rollover as it never touches your personal taxable account(s).
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Alan, as I noted , I didn't want to do it this way because the sending instituion would have charged me that $30 fee for making the check out to the receiving institution but it was free if the check was made out to me.
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Old 04-06-2014, 06:33 PM   #16
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Alan, as I noted , I didn't want to do it this way because the sending instituion would have charged me that $30 fee for making the check out to the receiving institution but it was free if the check was made out to me.
They're tough, I thought it was the wire they were charging for, not mailing a check.

I stand corrected, didn't read your post properly.
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