Staggering my and my spouse's IRA rollovers | Ed Slott and Company, LLC

Staggering my and my spouse's IRA rollovers

I have a Roth IRA at an out-of-town bank (Bank A) and my wife has both a Roth IRA and a Traditional IRA at the same out-of-town bank. All three of these CD's mature on January 14, 2019.

On January 14, 2019, my wife plans to withdraw her Bank A Traditional IRA and roll it over as a Roth Conversion to local Bank B (1. transfer the funds from my wife’s Bank A Traditional IRA to her Bank A savings account; 2. transfer from Bank A savings account online to Bank B’s checking account; and 3. go to Bank B to open a Roth IRA, completing the Roth Conversion, but not using up her one IRA rollover per 12 months since Roth Conversions do not count).

Also on January 14, 2019, I plan to withdraw my Bank A Roth IRA and roll it over to Bank B (1. transfer the funds from my Bank A Roth IRA to my Bank A savings account; 2. transfer from Bank A savings online to Bank B checking account; and 3. go to Bank B to open a Roth IRA, completing the rollover, using up my one IRA rollover per 12 months, but my wife will still have hers available just in the unlikely case we want 60-day access to some of her IRA funds at Bank B).

Also on January 14, 2019, my wife will transfer her Bank A Roth IRA to a new 12-month Bank A IRA CD.

On January 14, 2020 my wife plans to withdraw her Bank A Roth IRA and roll it over to Bank B (1. transfer the funds from her Bank A Roth IRA to her Bank A savings account; 2. transfer from Bank A savings online to Bank B checking account; 3. go to Bank B to open a Roth IRA, completing rollover, using up her one IRA rollover per 12 months, but as of January 1, 2020, I will again be eligible to make a 60-day IRA rollover since my 12 month waiting period will have expired).

Do you see any problems with this plan?

Thank you!

If you receive a distribution from your IRA on January 14, 2019 and roll any part of it over to an IRA of the same type, you will be prohibited from doing another before January 14, 2020 (not January 1).

So other than waiting until January 14, 2020 rather than January 1, 2020 please confirm that everything else in my question complies with the 12-month rule (i.e., (1) move my funds  from Bank A Roth IRA to Bank A savings; electronic transfer from Bank A savings to Bank B checking; move from Bank B checking to Bank B IRA CD, all within 60 days; and (2) moving my wife's funds from Bank A  TIRA to Bank A savings; electronic transfer from Bank A savings to Bank B checking; move from Bank B checking to Bank B Roth IRA CD (i.e., completing Roth Conversion all within 60 days does not use up her one rollover per 12 months).

The transactions outside of IRAs do not matter. What counts are the Roth IRA distribution and the return of the distribution within 60 days. For YOUR transactions you indicate a Roth IRA distribution, but did not indicate that the Bank B CD was also Roth. Make sure that the Bank B CD is in a Roth IRA. This uses up your one allowed 60 day rollover for 12 months.  For WIFE'S transactions a Roth conversion is indicated and this does NOT count as a rollover for purposes of the 12 month limit.  Therefore, she still has an available 60 day rollover. Also make sure that WIFE's Bank B CD is also in a Roth IRA.  For terminology purposes, IRA means a TIRA and a Roth IRA should always be referred to as a ROTH IRA, never just an IRA. And banks do make plenty of mistakes, so double check that you have Roth IRAs in Bank B.

Thanks so much Alan and DMx!

 

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