CWF's Primer on IRA
There are seven (7) IRA rollover rules:
An RMD is never eligible to be rolled
- A person is authorized to rollover only one distribution within a 12 month period,
- The rollover must be completed within
- An inherited IRA (non-spouse beneficiary)
is never eligible to roll over a distribution
from an inherited IRA:
- If property is distributed (and not
cash), such property must be a rollover.
The property cannot be sold and the proceeds
rollover over as is the case when
property is distributed from a qualified
- SIMPLE IRA funds may be rolled over
into a traditional IRA, SEP-IRA or a
401(k) or vice versa only if the individual
has met the 2 year requirement.
- Roth IRA funds can only be rolled over
into the same or a different Roth IRA.
A person who fails to comply with all
of the above 7 rules is ineligible to make
a rollover contribution.
The IRS has been granted the authority
by a 2001 tax law to grant relief to someone
who has missed the 60 day rule
because he or she incurred some difficulty
or hardship and it would be unjust,
or inequitable for the IRS to not waive
the 60 day rule. Waive means the IRS
creates a new 60 day period for the individual
to complete the rollover.
The IRS' position is - it does not have
the statutory authority to grant rollover
relief to a person who fails to comply
with any of the other rollover rules.
The IRS can't grant relief to any person
who has taken multiple IRA distributions
during a twelve month and makes an
ineligible rollover contribution.
The IRS can't grant relief to a nonspouse
beneficiary who was paid a distribution
by an IRA trustee.
The IRS can't grant relief and allow
someone to roll over a required distribution.
The IRS can't grant relief if a person
receives an in-kind distribution from his
or her IRA, sells the asset, and then
impermissibly rolls over the sales proceeds.
If a distribution is ineligible to be rolled
over but it is contributed as a rollover,
such distribution will need to be included
in the individual's taxable income and
it will be an excess contribution subject
to the excess contribution rules until corrected