Help with one rollover per year rule

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chambers136
Posts: 72
Joined: Tue Feb 28, 2017 9:49 am

Help with one rollover per year rule

Post by chambers136 » Thu Aug 31, 2017 12:48 pm

I'm having trouble figuring out what type of rollover I'm dealing with here. My wife has a 401k that is 80% Roth, 20% pre-tax. I called Fidelity (the receiving custodian) and they said she would need to call the current custodian and request a check for each part, one payable to (Fidelity FBO wife name), and the other to (wife name FBO wife name P/ADM). The second one is her SE401k. The second one seems odd to me, but the name of her SE401k is simply her name. Anyways, what are these considered? Are they 60 day rollovers, direct rollovers, something else? Fidelity cannot hold any of these funds, so a transfer in kind is not possible.

Thanks

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Earl Lemongrab
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Joined: Tue Jun 10, 2014 1:14 am

Re: Help with one rollover per year rule

Post by Earl Lemongrab » Thu Aug 31, 2017 1:06 pm

Only indirect (60-day) rollovers from like (traditional or Roth) IRAs are considered. So nothing to do with a 401(k) matters.

https://www.irs.gov/retirement-plans/ir ... -year-rule
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chambers136
Posts: 72
Joined: Tue Feb 28, 2017 9:49 am

Re: Help with one rollover per year rule

Post by chambers136 » Thu Aug 31, 2017 8:25 pm

Thanks!

kaneohe
Posts: 4445
Joined: Mon Sep 22, 2008 12:38 pm

Re: Help with one rollover per year rule

Post by kaneohe » Fri Sep 01, 2017 8:22 am

another link https://www.irs.gov/retirement-plans/pl ... tributions

which explicitly says that the rule does not apply to qualified plans (plans)

Spirit Rider
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Joined: Fri Mar 02, 2007 2:39 pm

Re: Help with one rollover per year rule

Post by Spirit Rider » Fri Sep 01, 2017 8:55 am

As previously pointed out these are direct rollovers and even if they weren't, they would not be subject to the one rollover per one year period rule.

It is still better to always do direct rollovers with qualified plans, because distributions to the participant are subject to 20% withholding. You would then have to make up the difference with other funds or the 20% would be subject to ordinary income tax and the 10% early withdrawal penalty if not age 59 1/2 or able to take advantage of the age 55 rule.

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