Am I permitted more than one (60 day) rollover per year from my Individual Retirement Account (IRA)?
There has been a rule change starting next year. Beginning January 1, 2015, an owner of an IRA will be allowed only one 60-day rollover per 12 month period (regardless of how many IRAs they own). A rollover is a transfer from one retirement account to another. For example, if a distribution is taken from a traditional IRA after December 31, 2014, in order to avoid paying tax on the distribution, the funds must be rolled over to another IRA within 60 days. In such case, the owner would not be eligible again to do another rollover until January 1, 2016. Before the new law goes into effect after this year, the current rule is that a rollover can be done every year for each IRA. The penalty for taking more than one distribution from an IRA in any 12 month period is that the distribution is reported as income and taxed. Moreover, if the owner tries to return the money to an IRA, it will be treated as an excess contribution subject to a 6 percent excise tax. However, one exception (there are a few) to the once-per-year rollover limit is that it does not apply to a trustee to trustee transfer. Comment: The new rules do not impact rollovers that pass from plan Trustee to plan Trustee. Only in the circumstance where the IRA passes through an owner’s hands will the 12 month limitation apply. So, all in all, this rule will not affect too many IRA investors. As always, if you have questions or would like to know more about estate planning please contact Steven E. Shane at: firstname.lastname@example.org | 301.575.0313. Steve provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.