rollover of IRA
My bank has a client who did a direct rollover of retirement plan into a bank IRA. She now would like to roll it over to her current employer plan. However the 4o1k provider does not provide any paperwork and would like the bank to issue the check payable to the 401k provider without paperwork. The bank is requiring that we have a letter of instruction from the client with sig guarantee. Other than bank policy is there any issues with how this will be handled.
Permalink Submitted by Alan - IRA critic on Fri, 2019-03-22 15:09
Shouldn’t be a problem, but the check should be payable to the 401k plan FBO “client”. Even though this will be a direct rollover client should be sure to decline withholding. The 1099R should be coded G, so client will have to report the direct rollover on Form 1040 and needs to include an explanatory statement with the return because the 401k plan will not issue a 5498 reporting receipt of a rollover contribution. This rollover does not count against the one rollover per 12 month limitation. Finally, client should make very sure that the amount of this rollover does not exceed the pre tax balance of all client’s non Roth IRA accounts.