[Gotadimple]

Quote:

Originally Posted by kaneohe I wonder whether the key factor is if you don't deposit or if you couldn't deposit it because the check is made out to the new custodian. Seems like if the check is made out to you it might be a different story even if you didn't deposit it.

When you do a conversion, a 1099 will be filed with the IRS (whether they move the funds electronically, or issue a check to move them). It is important to have both sides (the 401k custodian, and the IRA custodian) understand what will happen. I did this conversion last year between Fidelity and Schwab.

Yes, I received a check. No, I did not deposit it, I took it to Schwab for deposit. I received a 1099 from Fidelity showing I had liquidated the account and that it was being rolled over to another custodian. I received a 1099 from Schwab showing I had rolled over $. As a matter of fact, Schwab got on the phone with me when I talked to Fidelity and arranged the small details they needed with them right on the phone.

The OP stated that Vanguard was telling him and Vanguard/Vanguard conversion would require they issue a check and then the OP send the check back to Vanguard. It's their rules and may have to do with the difference between their institutional accounts (401K) and commercial accounts (IRA).

-- Rita

Tax impact: $0