**IRS Clarifies New Once-Per-Year Rollover Rule for 2015**
A rollover is a tax-free distribution from one retirement plan which is then contributed to another retirement plan. The contribution to the second plan is called a rollover contribution. When a taxpayer receives a check made out to them personally from the first retirement plan, this “distribution” falls under the “60 day rollover” rule. This means that the entire transaction MUST be completed by the 60th day. If not, the entire amount could be considered a “taxable” distribution.
Effective January 1st 2015
The New Once-Per-Year Rollover Rule allows for only one of these transactions per 365 days. A second IRA to IRA rollover (also Roth IRA to Roth IRA rollovers) within that one year will not be allowed and could cause a taxable distribution, plus a 10% penalty if under age 591⁄2. You could lose your IRA.
Trustee-to-trustee transfers are not affected by this rule. To avoid potential disasters, use this procedure whenever possible. (This is possible most of the time)
If you are considering a rollover of any kind and you’d like clarification that it is being done correctly feel free to contact my office “before” you proceed. I’ll be glad to have a discussion with you over the telephone. You can also inbox me if you have questions that need answers.
You can find further information at irs.gov under the IRS issued Announcement 2014-32.