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April 18, 2009

Transfer

Your Guide

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Definition
A nonreportable movement of assets between retirement accounts of the same type. Generally, transfers occur between:
  • Two traditional IRAs
  • A traditional IRA and a SEP IRA
  • From a SIMPLE IRA to a traditional IRA or SEP IRA, providing the SIMPLE has satisfied the two-year requirement
  • Two SEP IRAs
  • Two SIMPLE IRAs
  • Two Roth IRAs
  • Two HSAs
  • Two ESAs
  • Two qualified plans, where both qualified plans are maintained by the same employer. The terms of the movement of assets would determine if it is a transfer or a distribution & rollover.
Note: For these transactions (above) the trustee-to-trustee transfer is a nonreportable transaction, which means that no 1099-R or 5498s are issued for the transaction.
See caution in footnote:[1]
 Referring Cite
 Additional Helpful Information
 

 


[1] Some IRA owners may want to ‘expedite’ transfers by having the delivering financial institution give them a check for the amount, instead of waiting for the transfer to be completed between the two financial institution- as such transfers can take days or weeks, depending on the type. Individuals who opt to have the check given to them should exercise extreme caution when the check is requested. This is even more important for inherited IRAs, as irreversible can occur when transfers are erroneously processed as distributions.
[2] Revenue Ruling 78-406
[3] Treas. Reg. 1.408-8, Q&A-8

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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