401(k) transfer

[DTS]

Thank you all...

for trying to help me, help my client.

I do feel like a dunce for not using the correct terminology when posting my initial and subsequent questions and causing all this confusion. I read a post on another board many years ago from someone telling a poster to use the correct terminology so they could get the correct answer to their post.

This one got past me. Sorry! Thanks, again.

Dennis

[sea-tax]

DTS I agree with NYEA and Don on this , I completely misunderstood your question. I guess it is true what they say a lot is lost in translation with the written word. Sorry for the mix-up I will have to re-read questions next time.

[DonPriebe]

Oh, that's a different story!

Yes, he borrowed money from his IRA then had the custodian of the 401(k) (different custodian) wire money to the IRA to pay this back and complete the rollover.

In that case the direct transfer from the 401(k) to the IRA is just that -- a direct transfer. He'll get a 1099-R from the 401(k) custodian showing code G and no taxable income.

He'll also get a 1099-R from the IRA custodian showing the fully taxable distribution he took on which he will owe taxes and possibly penalty.

Easy way to look at it - he now has less in his retirement accounts and money in his hand. He took a distribution.

[DTS]

Nyea

Yes, he borrowed money from his IRA then had the custodian of the 401(k) (different custodian) wire money to the IRA to pay this back and complete the rollover.

Dennis

[New York Enrolled Agent]

Can a wired transfer of 401(k) funds into an IRA be used to complete a 60-day rollover that occured in the IRA?

Dennis

Dennis

Your question is not 100% clear to me. My reading might not be accurate - if it is, then I don't think I agree with the previous answers.

Are you saying a taxpayer took money out of an IRA and then used 401(k) money wired as trustee-to-trustee transfer to the same IRA account within 60 days after the IRA withdrawal?

[DTS]

Don and sea-tax

Thanks for the help. I felt it may be OK, but I did not want to close one can of worms only to open another!

The 1099-R totals exactly what I figured up from the broker's statement for deposits.

Again, thank you.

Dennis

[sea-tax]

Agree with Don, no problem. DTS what you are refering to is called a direct trustee to trustee transfer. These types of rollovers are done all the time. The 1099r issued form the departing company should have Code G for direct rollover.

[DonPriebe]

Why not?

Can a wired transfer of 401(k) funds into an IRA be used to complete a 60-day rollover that occured in the IRA?

Can't see why the method of funds delievry (check, cash, wire, EFT, mail, FedEx, UPS, hand-delivery by messenger, etc.) would make any difference as long as it's completed within the 60 day limit.

[DTS]

Can a wired transfer of 401(k) funds into an IRA be used to complete a 60-day rollover that occured in the IRA?

I have searched high and low for this answer, but can find nothing.

Thank you,

Dennis