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IRA At Failed Bank. Who Does FDIC Make Check Payable To? (Could Be Forced Distribution)

DepositGuy835
  |     |   21 posts since 2015

If a customer has an IRA CD at a bank that fails and the FDIC makes the check out to the IRA account holder, that is a distribution. The customer could rollover in 60 days. However if the customer has already done a rollover in the last 365 days, a rollover is not possible and the customer would have a forced IRA distribution of the entire IRA CD.

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Answers
RickZ
  |     |   218 posts since 2010
My immediate thought was that it would be unreasonable and unfair to penalize a taxpayer for a distribution that the taxpayer did not request and has no control over. Glad to see that the IRS takes that position.

https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/firstnbc-ira-rollovers-irs...
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IGR
  |     |   580 posts since 2020
That is an intricate issue to comprehend!
I suppose IRS would have no choice but to exempt FDIC distributions from current interpretation of one-per-year rollover limit, provided IRS was given such discretion in the original Tax Court ruling.
Or FDIC will have to act as fiduciary plan administrator of IRA Accounts - unlikely and messy scenario..
But in general, what is the work around of rollover limit when IRA CD matures, more than one per 12 months. Renew in the same FI as in the same IRA plan? Direct transfer from? Matured IRA CD to New IRA CD?
I am curious because have no experience or knowledge whatsoever.
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