IRA Rollover Rule Change

IRA Rollover Rule Change

Effective January 1, 2015, the IRS is limiting indirect IRA rollovers to one per IRA owner per year

The IRS has changed its interpretation of the one-per-year limit on tax-free indirect rollovers between IRAs. As of January 1, 2015, investors can only make one tax-free indirect rollover between IRAs during any 12-month period, regardless of the number of IRAs they own.

Background

For many years, the IRS’ position was that taxpayers could roll over one IRA distribution per 12-month period for each IRA owned. IRS Announcement 2014-32 (issued on November 10, 2014) states that the rollover limitation now applies per IRA owner instead of per IRA.

Impacted requests and account types

This rule applies to traditional, Roth, SEP, SARSEP and SIMPLE IRAs.

The rule does not apply to:

  • Direct rollovers to or from qualified plans.
  • Transfer of assets (TOAs) or direct rollovers between IRAs.
  • Rollover conversions from traditional IRAs to Roth IRAs.

 

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