Pacun Posted February 17, 2016 Report Share Posted February 17, 2016 I know of the case of a lawyer that was penalized by the IRS because he rolled over too many IRAS within 12 months. I have a client who had about 4 IRAS, in October 2015, he open a new IRA, deposited 5,500 on the new IRA and rolled over the other 4 IRAs (same bank) to the new one. Questions: He should get 1099-R with code G from the bank, correct? Is he going to be penalized as the lawyer for rolling over more than 1 IRA within 12 months? Thank you. Quote Link to comment Share on other sites More sharing options...
bbstacker Posted February 17, 2016 Report Share Posted February 17, 2016 I believe if the rollover (transfer) was trustee to trustee there is not a limit to the number of rollovers per 12 months. If the tax taxpayer received the funds and within 60 days deposited to another IRA, the once every 12 months is going to be an issue. If this was a trustee to trustee transfer they may or may not receive Form 1099R, depends on the IRA administrator. 3 Quote Link to comment Share on other sites More sharing options...
Roberts Posted February 17, 2016 Report Share Posted February 17, 2016 The penalty is about rolling the same money more than once during the 12 months - not more than 1 rollover. Routinely people will roll multiple IRAs into 1 during a single period and no penalty earned. Don't roll the same IRA multiple times. I believe you should receive a 1099R. 3 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 17, 2016 Report Share Posted February 17, 2016 (edited) 37 minutes ago, Roberts said: The penalty is about rolling the same money more than once during the 12 months - not more than 1 rollover. Routinely people will roll multiple IRAs into 1 during a single period and no penalty earned. Don't roll the same IRA multiple times. I believe you should receive a 1099R. Beginning Jan 1, 2015 you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own (Announcement 2014-15 and Announcement 2014-32). The limit will apply by aggregating all of an individual’s IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. Trustee-to-trustee transfers between IRAs are not limited Rollovers from traditional to Roth IRAs ("conversions") are not limited The above was copied from this IRS page. Edited February 17, 2016 by kcjenkins to add emphasis to the critical point, for this thread. 2 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 17, 2016 Report Share Posted February 17, 2016 And you should definitely get 1099-R's for all the transactions. Report; easier than dealing with CP2000 letters. 3 Quote Link to comment Share on other sites More sharing options...
Roberts Posted February 17, 2016 Report Share Posted February 17, 2016 Sorry, I was assuming these were all trustee-to-trustee transfers. I've always been under the impression you could do as many as you wanted in 12 months but the same money could only go through 1 of those. Honestly, I don't know anyone that does a physical rollover. Gets the money physically in their name and deposits it within 60 days to another IRA. I've never actually seen one of those in real life. 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 18, 2016 Author Report Share Posted February 18, 2016 5 hours ago, Roberts said: Honestly, I don't know anyone that does a physical rollover. Gets the money physically in their name and deposits it within 60 days to another IRA. I've never actually seen one of those in real life. You should read the case about the lawyer who rolled over a few IRAs and a few times. Each time the IRS charged him penalty for the distribution. Lawyer took the case to tax court and the IRS won. 1 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 18, 2016 Report Share Posted February 18, 2016 8 hours ago, Pacun said: You should read the case about the lawyer who rolled over a few IRAs and a few times. Each time the IRS charged him penalty for the distribution. Lawyer took the case to tax court and the IRS won. Good. A lawyer should know, well, the law. 2 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 18, 2016 Report Share Posted February 18, 2016 7 hours ago, RitaB said: Good. A lawyer should know, well, the law. However, I note the use of the conditional. Should. Yeah. "I want to live in theory - everything works in theory!" said the button for sale at the sci-fi convention. 5 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 18, 2016 Report Share Posted February 18, 2016 49 minutes ago, Catherine said: However, I note the use of the conditional. Should. Yeah. "I want to live in theory - everything works in theory!" said the button for sale at the sci-fi convention. Theoretically, it would be good to pay an accountant, too. Either know what you're doing or hire somebody who does. 2 Quote Link to comment Share on other sites More sharing options...
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