Two 60-day rollovers from two different accounts - is this OK? | Ed Slott and Company, LLC

Two 60-day rollovers from two different accounts - is this OK?

A client has a Traditional IRA and a Simple IRA. He would like to take a distribution from each account, then put everything back into the accounts the individual distributions came out of within 60 days (IRA distribution back into the same IRA, Simple IRA distribution back into the same Simple IRA). As I read pub 590, pages 23-25, this appears to be allowed. Am I correct?

You are correct for this year, but effective 1/1/2015 new rules take effect that limit your rollovers to one per 12 months for ALL your IRA accounts instead of one per account. See http://www.irs.gov/pub/irs-drop/a-14-15.pdf. Pub 590 will be changed to reflect the new rules.

I assume there's nothing in the new rules that would preclude both a husband and wife each doing 60 day rollovers within a calendar yet.  Is that correct?

RIght. Any limitations apply separately to each spouse.

The rule isn't new.  It's in Section 408(d)(3).  See Alvan L. Bobrow, T.C. Memo. 2014-21 (Jan. 27, 2014): http://ustaxcourt.gov/InOpHistoric/BobrowMemo.Nega.TCM.WPD.pdfBidyat K. Bhattacharyya, T.C. Memo. 2007-19: http://ustaxcourt.gov/InOpHistoric/Bhattacharyya.TCM.WPD.pdfMarshall H. Martin, T.C. Memo 1992-331: http://www.legalbitstream.com/scripts/isyswebext.dll?op=get&uri=/isysquery/irl8dd0/2/docaff’d., 987 F.2d 770 (5th Cir. 1993).

The sequel to Bobrow is that the taxpayer filed a motion for reconsideration, and the case was apparently settled.  Here is the Tax Court's order:  http://www.ustaxcourt.gov/UstcDockInq/DocumentViewer.aspx?IndexID=6250767 

 

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