All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Esteemed Pioneer
Posts: 37
Registered: ‎11-26-2015

trustee to trustee transfer

If I transfer an traditional IRA from one bank to another via trustee to trustee transfer, do I have to report it on my

tax return? Would I report it as a rollover? I'm not sure the HR Block software makes accomodation for trustee to trustee transfers. Thanks!

Tax Pro
Posts: 5,780
Registered: ‎02-23-2016

Re: trustee to trustee transfer

[ Edited ]

Hi rcl1531,

 

The type of transfer that you're referring to is a direct rollover.  This does have to be reported on your tax return, however you will not be taxed on the funds at all so long as the type of account they are transferred into is a traditional IRA or another qualifying account such as a 401(K).

 

If you transfer your funds into a Roth IRA then you will have to pay the income tax, but not the 10% early withdrawl penalty.

 

If you do transfer your funds into a new account then you will receive a From 1099-R at tax time from the instution where the original account was held at tax time.  Your Form 1099-R should have an appropriate code on it in Box 7 indicating that this is a direct rollover to a qualifying account.

 

  • Code "G" indicates a direct rollover to a qualifying account such as a traditional IRA or a 401(K).  When you enter this code from Box 7 into the tax software it will remove the amount on your Form 1099-R from your taxable income and report it on Line 15A of your Form 1040 as a non-taxable rollover.

 

I hope this helps you out & please ask if you have any other questions.

Pioneer
Posts: 1
Registered: ‎10-12-2017

Re: trustee to trustee transfer

Can I make more than one "rollover" per year from an employer plan to an outside IRA as long as the funds are transferred from the plan administrator to the IRA brokerage?  I'm over 60 and retired. IRS Website identifies "rollover", "direct transfer", and "trustee to trustee" transfer.  I see that "trustee to trustee" transfers can be multiples without penalty, but can tell if "direct transfer" are exempt from the once per year rule.

Tax Pro
Posts: 5,780
Registered: ‎02-23-2016

Re: trustee to trustee transfer

Hi Options17,

 

 

Welcome to the H&R Block community.

 

Yes, so long as the transfers are direct (from one plan/account administrator or trustee to another) you can complete as many rollovers as you want in a year.

 

Indirect rollovers (funds are distributed to you and then deposited into the new account) are limited to 1 per year though.

 

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)