Partial Withdrawal of Proposed Regulations On IRA Rollovers

In light of its changed interpretation, the IRS has withdrawn part of its proposed regulations governing the one rollover per year rule.

Document Excerpt

Based on the language in section 408(d)(3)(B), a recent Tax Court opinion, Bobrow v. Commissioner, T.C. Memo. 2014-21, held that the limitation applies on an aggregate basis. Thus, under Bobrow, an individual cannot make an IRA-to-IRA rollover if the individual has made an IRA-to-IRA rollover involving any of the individual’s IRAs in the preceding 1-year period. The IRS intends to follow the opinion in Bobrow and, accordingly, is withdrawing paragraph (b)(4)(ii) of ยง 1.408-4 of the proposed regulations and will revise Publication 590. This interpretation of the rollover rules under section 408(d)(1)(B) does not affect the ability of an IRA owner to transfer funds from one IRA trustee or custodian directly to another, because such a transfer is not a rollover and, therefore, is not subject to the one-rollover-per-year limitation of section 408(d)(3)(B). See Rev. Rul. 78-406, 1978-2 C.B. 157.

Link

https://www.federalregister.gov/articles/2014/07/11/2014-16281/individual-retirement-plans-and-simplified-employee-pensions-partial-withdrawal

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