Mat Sorensen


January 13, 2015

Starting January 1, 2015, you are only allowed one 60-day rollover for all of your IRAs in a twelve-month period. This change was the result of a Tax Court case reported on my blog last year known as Bobrow. Click here for the details. The important details of the new rule is that you can only take one 60-day rollover, in a 12 month period. The prior practice was that you could take one 60-day rollover per IRA per 12 month period. However, the Bobrow case changed that rule and now you can only take one 60-day rollover for all of your IRAs per 12 month period. Keep in mind that a 60-day rollover is a rollover of IRA funds whereby you receive the money personally from the IRA custodian and then you have 60 days to re-deposit them into the same IRA or into a new IRA to avoid a distribution of the funds. This new rule does not apply to trustee-to-trustee transfers (aka, direct rollovers)whereby one retirement plan custodian (IRA or 401(k)) transfers funds directly to your new custodian. You can do as many direct trustee-to-trustee transfers as you desire and as a result we recommend that clients always use a trustee-to-trustee transfer when rolling over retirement plan funds as you will avoid any potential issues under the new 60-day rollover rules. The IRS has provided a helpful summary of the new rule here. I have prior articles written on the case history of the 60-day rollover subject here.

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