on IRA Rollovers
Internal Revenue Service recently issued guidance clarifying
the impact a 2014 individual retirement arrangement (IRA)
rollover has on the one-per-year limit imposed by the Internal
Revenue Code on tax-free rollovers between IRAs.
The clarification relates to a change in the way the
statutory one-per-year limit applies to rollovers between IRAs.
The change in the application of the one-per-year limit
reflects an interpretation by the U.S. Tax Court in a January
2014 decision applying the limit to preclude an individual
from making more than one tax-free rollover in any one-year
period, even if the rollovers involve different IRAs.
Before 2015, the one-per-year limit applies only on an
IRA-by-IRA basis (that is, only to rollovers involving the
same IRAs). Beginning in 2015, the limit will apply by
aggregating all an individual's IRAs, effectively treating
them as if they were one IRA for purposes of applying the
To allow transition time, the IRS made it clear that the new
interpretation will apply beginning Jan. 1, 2015. A
distribution from an IRA received during 2014 and properly
rolled over (normally within 60 days) to another IRA, will
have no impact on any distributions and rollovers during 2015
involving any other IRAs owned by the same individual. In
other words, IRA owners will be able to make a fresh start in
2015 when applying the one-per-year rollover limit to multiple
Although an eligible IRA
distribution received on or after Jan. 1, 2015 and properly
rolled over to another IRA will still get tax-free treatment,
subsequent distributions from any of the individual's IRAs
(including traditional and Roth IRAs) received within one year
after that distribution will not get tax-free rollover
treatment. As the guidance makes clear, a rollover between an
individual's Roth IRAs will preclude a separate tax-free
rollover within the 1-year period between the individual's
traditional IRAs, and vice versa.
As before, Roth conversions (rollovers from traditional IRAs
to Roth IRAs), rollovers between qualified plans and IRAs, and
trustee-to-trustee transfers--direct transfers of assets from
one IRA trustee to another--are not subject to the
one-per-year limit and are disregarded in applying the limit
to other rollovers.
IRA trustees are encouraged to offer IRA owners requesting a
distribution for rollover the option of a trustee-to-trustee
transfer from one IRA to another IRA. IRA trustees can
accomplish a trustee-to-trustee transfer by transferring
amounts directly from one IRA to another or by providing the
IRA owner with a check made payable to the receiving IRA
For more information, please contact our office
If you'd like more information about IRA Rollovers or tax planning for 2015,
give us a call at (301) 657-8080. We'll sit down with you,
discuss your specific tax and financial needs, and develop a
plan that works for you, your family or your business.
Financial Services at Sullivan & Company, CPAs
Sullivan leads our Financial Services Division and is here to
help you navigate your financial future. As an Investment
Advisor Representative, he is able to provide an
independent opinion on the investments you already own or
are considering buying.
We can structure a portfolio
based on your risk tolerance or we can help you decide how
to invest in your company 401(k) plan. We work with each
client to identify their concerns and to provide solutions
according to their situation.
is also experienced in company retirement plans. If you own
a business that does not have a plan; we can discuss your
options and set up a plan that fits your company.
If your business already has a
plan; we offer a free evaluation of the plan to ensure that
it is up to date and working well for you and your
Our goal is to provide personal, unbiased and independent
advice to help you make well-informed decisions about your
financial life and investments.
Contact Paul Sullivan or Jordana Para to set up a free initial
consultation (301) 657-8080.
And as always if you have any questions about accounting or
investments and how they effect you or your business, please give
us a call. We
can help guide you in the right direction.
Remember you can call our offices if you have any
questions about these or any other accounting, tax,
financial planning or insurance related issues, at
Regards, Paul Sullivan, CPA
President, Sullivan & Company