Qualified Plan to IRA Rollover
The IRS, effective for IRA distributions after December 31, 2014, adopted the Tax Court position in Bobrow v. Commissioner (TC Memo 2014-21) that the once-per year IRA rollover limitation applies on an aggregate basis, meaning that an individual could not make an IRA-to-IRA rollover if he or she had made such a rollover involving any of the individual’s IRAs in the preceding 1-year period. (Ann. 2014-15) The one-year period is measured based on the date a distribution is received. If the second distribution is received before the same date one year later, it occurs within the period barred by the one-year limit (IRC Sec. 408(d)(3)(B)).
Example – Jack takes a distribution from his IRA on June 30 of year one and subsequently rolls over the distribution within the 60-day rollover period. Jack must wait until June 30 of year two before another distribution is eligible for a rollover. Any additional distributions taken during the one-year waiting period would be taxable.
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Although the IRA’s once per 12-month period rollover limitation also applies to SEPs and SIMPLE plans, it does not apply to qualified plans. (Ann. 2014-32).