IRS fills in details of one a year IRA rollover rule
 

IRS fills in details of one a year IRA rollover rule

The IRS clarified how the recently announced change in how it interprets the statutory one-rollover-per-year rule for individual retirement arrangements (IRAs) will affect 2014 rollovers and how the rules will apply starting in 2015 (Announcement 2014-32).

Sec. 408(d)(3)(A)(i) permits a tax-free rollover of funds in a taxpayer’s IRA as long as the amount distributed to the taxpayer is paid into an IRA for the taxpayer’s benefit within 60 days, subject to the one-rollover-per-year limit of Sec. 408(d)(3)(B). Prior IRS guidance had applied this rule on an IRA-by-IRA basis. However, the Tax Court in Bobrow, T.C. Memo. 2014-21, applied the rule on an aggregate basis, meaning no matter how many IRAs a taxpayer has, the taxpayer is limited to one rollover per year. In March, the IRS announced it would follow the Bobrow decision (see prior coverage here and here). Read more on the Journal of Accountancy.