Trustee to Trustee Transfer Question?
I am dealing with a case where a potential client just completed a trustee to trustee transfer with another company June 10th, 2008. After completing this we met and talked with them and they want to bring their business over to us.
The problem is, that because of the close proximity in time in which they just completed a trustee to trustee transfer, we have been told that we are not able to do another trustee to trustee transfer at this time to get the business.
Are there any loopholes or exemptions to this? Could we roll it over by any chance before a year from June 10th, 2008? We are trying to figure out how to save this business by any means possible and it seems as if it might not even be possible. Please let me know your thoughts.
Permalink Submitted by Alan Spross on Fri, 2008-07-11 19:08
There are no waiting periods or quantity limits on direct trustee transfers, only on rollovers. Therefore, you should be able to complete a second transfer. Of course the second custodian may want to charge an exit fee for loss of the account according to their usual procedures.
If they refuse to do the transfer, then the client can still do a rollover as long as he realizes that a 12 month waiting period will then commence before he can do another one. Of course, if he did a rollover within 12 months prior to the June transfer, he must also wait out that 12 month period. The main point is that anything done by direct transfer can be totally ignored.
Permalink Submitted by [email protected] on Fri, 2008-07-11 20:00
Can we get some IRS documentation on this? Our Trustee Company is telling us there is a limit of 1 per year.
Permalink Submitted by Denise Appleby on Fri, 2008-07-11 20:45
Bear in mind that under NYSE rules they cannot refuse to honor a request for a transfer between IRAs, providing the transfer is in good order.
This may seem like a silly question, but I have to ask as the term is very often misused. Was this really a transfer or a rollover? If it was a rollover, then as Alan S explained, the 12-month limitation applies. If it was a transfer, then the limitation does not apply. Anyway, that point may be moot, as- regardless of how the movement was done (rollover or transfer), the client can still do a transfer anytime he wants to. The key is to make sure the proper terminology is used when communicating with the IRA custodian. The client should request a trustee-to-trustee transfer. The term rollover should [u][b]not [/b][/u]enter into the conversation at all.
Transfer defined here : http://www.retirementdictionary.com/Transfer.htm
Rollover defined here: http://www.retirementdictionary.com/Rollover-Contribution.htm
Permalink Submitted by Alan Spross on Fri, 2008-07-11 20:57
Pub 590 reference per att’d at end of p 21.
http://www.irs.gov/pub/irs-pdf/p590.pdf