Advanced Underwriting Consultants

Ask the Experts – March 26

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers.  Here’s the question of the day.

Question: I recently read somewhere that the one-rollover-per-year rule for IRAs applies to the individual based on all of his IRAs, and not each IRA individually. Is this a new rule? Is it effective immediately?

Answer: Yes, it’s the law, but the IRS has recently released an announcement delaying its enforcement until 2015 at the earliest.

We’ve written about the new rule a couple times, which you can find here, discussing how the Bobrow case changed the rule to apply per-individual, not per-IRA; and here, discussing that the one-rollover-per-year rule don’t apply to direct rollovers.

In Announcement 2014-15, the IRS acknowledged that the Bobrow rule is a new interpretation and that it might cause difficulty for some administrators. Therefore, it stated that although the one-rollover-per-year limitation still applies, the IRS is providing transition relief for IRA owners by not applying the Bobrow interpretation of the rule before January 1, 2015. This means that individuals can still accomplish multiple 60-day rollovers until 2015, as long as they fall within the parameters previously published in IRS Publication 590.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.