The Three Pitfalls of IRA Rollovers



Comments (4)

  1. Jim says:

    The term “Rollover” is when an individual receives a physical IRA distribution and within 60 days deposits it in the same or another IRA.

    Moving money between IRA’s without receiving a physical distribution is called a “Direct Transfer,” not a “Rollover.”

    [Reply]

    Wall Street Daily Research Reply:

    Thank you for your comment. The IRS makes a clear distinction between a rollover and a funds transfer. In a rollover, the money being moved is paid to you and you then deposit the funds in another account. In a funds transfer, the custodian of the IRA account you are withdrawing from transfers the funds directly to the custodian of the IRA account you designated to receive the funds and you never receive the money.

    [Reply]

  2. Frances says:

    Helpful, but I have a minor puzzle – does moving a small, newly-established IRA by court order have any tax consequences or limitations for further withdrawal if I transfer it to another existing IRA at a brokerage house?

    [Reply]

    Wall Street Daily Research Reply:

    Thank you for your comment. Unfortunately, we are unable to provide personalized investment advice.

    [Reply]

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