How IRA Transfers and Rollovers Differ

• A transfer is a direct movement of IRA funds from one IRA to another IRA. Transfers generally take place between IRAs of the same type: Traditional IRA to Traditional IRA, Roth IRA to Roth IRA. With a transfer, the IRA owner does not physically receive the IRA funds. The check is made payable to the receiving financial institution for the benefit of the IRA owner.

• A rollover is a movement of IRA funds to or from one IRA to another IRA or eligible retirement plan. The individual receives a distribution from their IRA and rolls it into another IRA of the same type. The check is made payable to the IRA owner, and that individual has 60 days after the date of receipt to roll over the funds. An individual can make an unlimited number of transfers but can only make one IRA-to-IRA rollover in a 12-month period. This includes Traditional and Roth IRAs in aggregate. This rollover limitation does not apply to a rollover from an IRA to an eligible retirement plan or a rollover from an eligible retirement plan to an IRA.

• Transfers are nonreportable transactions and are not reported as IRA distributions on Form 1099-R. A rollover, however, is a reportable transaction. Distributions from the IRA or eligible retirement plan are reported on Form 1099-R.

For more information about IRA transfers and rollovers, contact Al Kauffman at 800-821-5104, ext. 6840, or Victoria Fernandes at ext. 6887.