IRA One-Rollover-Per-Year Rule

[Steve Stang]

Sorry, it's me again.


Okay, Publication 575 (which is for PENSIONS, not IRAs) says "An eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan except ... A period of 10 years or more."

http://www.irs.gov/publications/p575/ar02.html#en_US_2013_publink1000226896

An IRA is NOT a "qualified retirement plan".



§1.408-4(b): "(b) Rollover contribution—
(1) To individual retirement arrangement. Paragraph (a)(1) of this section {includable in taxable income} shall not apply to any amount paid or distributed from an individual retirement account or individual retirement annuity to the individual for whose benefit the account was established or who is the owner of the annuity if the entire amount received (including the same amount of money and any other property) is paid into an individual retirement account, annuity (other than an endowment contract), or bond created for the benefit of such individual not later than the 60th day after the day on which he receives the payment or distribution.

That was the basis of my first response. I think the IRA distributions ARE eligible for rollover, and if they are included as taxable income, there would be no penalty. The non-IRA one may not be eligible.


Am I misreading it? What do you think?

I personally think that 72(t) is not an option. I think that the rollover is the best way to handle the annuity distributions from the IRA. I think that he can roll the IRA into another IRA. I think that he still will be left with taxable income for the distributions from the non-IRA annuity. I don't read the provision above or the Rev Proc for 72(t) calculations as applying to a non-IRA.