Keogh Pension

[johnsapea]

Client has a money purchase plan and in February 2009 moved his account from Vanguard into his present Fidelity account. He would like to terminate his MPPP and roll over his Fidelity account into a traditional IRA account. Is the qualified pension plan limited to one roll over per individual year the same as the IRA restriction?
He is an MD and is cutting back on his practice and will retire soon.

John

[ChEAr$]

Client has a money purchase plan and in February 2009 moved his account from Vanguard into his present Fidelity account. He would like to terminate his MPPP and roll over his Fidelity account into a traditional IRA account. Is the qualified pension plan limited to one roll over per individual year the same as the IRA restriction?
He is an MD and is cutting back on his practice and will retire soon.

John

When he transferred the plan from one Keough to another keough, that was not a
rollover, a term which would apply if the Keough were closed out and proceeds
"rolled over" into an IRA.

[johnsapea]

Keogh

That is the point Harlan. The Vanguard account was closed out and then put into the Fidelity account. Wasn't it a distribution if you take the funds out of the Vanguard account ant then "transfer" "roll over" to another account even though the Fidelity account was also a Keogh account and it was from trustee to trustee?

Don't the regs say that you can only make one Roll over for an IRA in a given year? Moving from one IRA account to another IRA account is considered a "roll over" isn't it. He has not attempted to make a "roll over" to an IRA yet. The question is can he make a "roll over" to the IRA in 2009 if the transfer from Vanguard is considered a current year "roll over"

John

[ChEAr$]

That is the point Harlan. The Vanguard account was closed out and then put into the Fidelity account. Wasn't it a distribution if you take the funds out of the Vanguard account ant then "transfer" "roll over" to another account even though the Fidelity account was also a Keogh account and it was from trustee to trustee?

Don't the regs say that you can only make one Roll over for an IRA in a given year? Moving from one IRA account to another IRA account is considered a "roll over" isn't it. He has not attempted to make a "roll over" to an IRA yet. The question is can he make a "roll over" to the IRA in 2009 if the transfer from Vanguard is considered a current year "roll over"

John

My point is that a Keough is not an IRA, so the once per year IRA rollover rules don't
apply.

[Kram BergGold]

Transfer v rollover

A transfer is when the money goes from institution to institution. You can these whenever you want. A rollover is when institution A gives you a check and you take it to institution B. These are limited to 1 per year. The reason is in example one no benefit has been gained by the taxpayer. In example 2 a taxpayer could keep loaning himself money for 59 days by taking it out, holding it for 59 days, putting it into a new IRA, then withdrawing it....

[johnsapea]

1099r

Won't Vanguard issue a 1099R indicating a complete distribution with a code G for a roll over?

The other part of my original question was trying to determine if the Keogh Plans were subject to the same rules as an IRA.

My understanding from further research: An IRA transfer from trustee to trustee is not a roll over because there is no distribution to you. Because it is not a "roll over", it is not afffected by the 1 year waiting period required between roll overs. Pub 590.

Kram,
You give a good explanation of the difference and the reason for the restrictions.

John

[Gene V]

Won't Vanguard issue a 1099R indicating a complete distribution with a code G for a roll over?

John

This is how it reads from TTB page 13-22

Trustee to Trustee Transfer
Funds are directly transferred from one trustee to another without
ever being distributed to the participant. Because the participant
never has possession of the funds, the 60-day rollover period
and the once-per-year limitation does not apply.
How to report a transfer. A trustee to trustee transfer from one
IRA to another should not be reported on a 1099-R and does not
need to be reported on the 1040. Exception: If the transfer is a direct
rollover (described below), the transfer is reported as a rollover
distribution. A 1099-R should be issued, and the taxpayer
reports the total distribution on line 16a, Form 1040, and zero on
line 16b.
Direct rollovers. A transfer from the trustee of an employer
qualified plan to the trustee of an IRA is called a direct rollover.
The mandatory withholding rule for distributions from qualified
plans does not apply to direct rollovers.
Employer qualified plans are required to give plan participants
the option of having an eligible rollover distribution paid directly
to a traditional IRA. This rule does not apply if the eligible rollover
distribution is less than $200.