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What Constitutes An IRA Rollover?

jib2424
  |     |   34 posts since 2014

It is my understanding that the IRS only allows one tax free IRA rollover each year. Is this correct? What constitutes such an IRA rollover? If I move IRA funds from an IRA CD account at one credit union to another IRA CD account at another credit union, does this constitute an IRA rollover that falls within the IRS definition of those rollovers which are limited to one a year?

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rockies
  |     |   295 posts since 2018
If you are doing a "transfer" of IRA assets from one financial institution to another and you do not take direct possession of the funds, then this is NOT considered a rollover and is not taxable. The sending institution will typically send a check to the receiving institution directly. Check is written to "Financial Institution Name For the Benefit of (Your Name)". You never receive the funds. There is no limit on the number of these you can do in a 12 month period.

If you do a "rollover", then typically the check is written in your name and you are responsible for depositing these assets in the new IRA within 60 days. In this case, only one of these "rollover" transactions is permitted tax free per 12 month period. Consult an accountant if you have questions as you need to be sure you do this correctly to avoid an unanticipated taxable event.
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jib2424
  |     |   34 posts since 2014
Thank you very much.
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