Rollover

<p> <em>Editor's Note</em>: The SECURE Act 2.0 contained a new rule that expands the availability of charitable giving with retirement funds. Under the new law, taxpayers will be allowed to make a one-time qualified charitable distribution of up to $50,000 from an IRA to a charitable remainder annuity trust, charitable remainder unitrust or charitable gift annuity. To qualify, charitable remainder annuity trusts and charitable remainder unitrusts must be funded solely with qualified charitable distributions. Charitable gift annuities be funded exclusively by qualified charitable distributions and commence fixed payments of five percent or greater not later than one year from the date of funding. The new law also indexes the current limit for qualified charitable distributions to inflation for tax years beginning after 2022 (to $55,000 for 2026). </p><p>A taxpayer age 70½ or older is permitted to make a qualified charitable distribution (QCD) from a traditional IRA or Roth IRA that is not includable in the gross income of the taxpayer.<a href="#_ftn1">¹</a> The exclusion for qualified charitable distributions generally is available for distributions from any type of IRA (including a Roth IRA described in Section 408A and a deemed IRA described in Section 408(q)) that is neither an ongoing SEP IRA described in Section 408(k) nor an ongoing SIMPLE IRA described in Section 408(p).<a href="#_ftn2">²</a></p><p> The provision permitting a qualified charitable distribution to be excluded from gross income was allowed to expire at the end of 2011, but the American Taxpayer Relief Act of 2012 ("ATRA 2012") retroactively revived the provision for 2012 and extended it for the 2013 tax year. The Tax Increase Prevention Act of 2014 extended the provision retroactively for 2014, and the Protecting Americans Against Tax Hikes (PATH) Act of 2015 made the provision permanent.<a href="#_ftn3">³</a></p><p> A qualified charitable distribution is any distribution: </p><p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; not exceeding $100,000 in the aggregate during the taxable year (the amount is indexed to $111,000 for 2026, $108,000 for 2025 and $104,000 in 2024);<br/>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; made directly, in a trustee-to-charity transfer (including a check from an IRA made payable to a charity and delivered by the IRA owner to the charity);<a href="#_ftn4">⁴</a><br/>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; from a traditional or Roth IRA (although distributions from ongoing SEPs and SIMPLE IRAs do not qualify);<br/>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to a public charity (but not a donor-advised fund or supporting organization);<br/>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; that would otherwise qualify as a deductible charitable contribution (not including the percentage of income limits in IRC Section 170(b) (Q 739)); and<br/>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to the extent the distribution would otherwise be includable in gross income.<a href="#_ftn5">⁵</a></p><p> No charitable income tax deduction is allowed for a qualified charitable distribution.<a href="#_ftn6">⁶</a>For 2025, the IRS introduced a new Code Y on the final version of Form 1099-R (the new Code Y was also included in the draft instructions). Going forward, IRA custodians will use Code Y to classify the IRA distribution as a qualified charitable distribution.Use of Code Y is optional for 2025 and 2026.</p><p> If a qualified charitable distribution is made from any IRA funded with nondeductible contributions, the distribution is treated as coming first from deductible contributions and earnings.<a href="#_ftn7">⁷</a> This is contrary to the general rule that distributions from a traditional IRA with both deductible and nondeductible contributions are deemed made on a pro-rata basis.<a href="#_ftn8">⁸</a></p><p> Qualified charitable distributions count toward a taxpayer's required minimum distributions ( Q <a href="javascript:void(0)">3682</a>).<a href="#_ftn9">⁹</a></p><p> The prohibition on making a qualified charitable distribution from a SEP IRA or a SIMPLE IRA only applies to "ongoing" SEP IRAs or SIMPLE IRAs. These kinds of IRAs are ongoing if a contribution is made for the taxable year of the charitable distribution.<a href="#_ftn10">¹⁰</a></p><p> Post-SECURE Act, taxpayers who make both post-70½ (deductible) IRA contributions and take qualified charitable distributions (QCDs) are also subject to an anti-abuse rule. Future QCDs are reduced by the total amount of deductible post-70½ IRA contributions that have not offset another QCD, although the amount cannot be reduced below zero.<a href="#_ftn11">¹¹</a>Amounts that cannot be treated as a pre-tax QCD can be treated as an itemized deduction for the taxpayer.</p><p><em>Example:</em> An individual who turned age 70½ before 2020 deducts $5,000 for contributions for each of 2020 and 2021 but makes no contribution for 2022. The individual makes no QCDs for 2020 and makes QCDs of $6,000 for 2021 and $6,500 for 2022.</p><p>The excludable amount of QCDs for 2021 is the $6,000 of QCDs reduced by the $10,000 aggregate amount of post-age 70½ contributions for 2021 and earlier taxable years. For this individual, these amounts are $5,000 for each of 2020 and 2021, resulting in no excludable QCDs for 2021 (that is, $6,000 – $10,000 = ($4,000)).</p><p>The excludable amount of the QCDs for 2022 is the $6,500 of QCDs reduced by the portion of the $10,000 aggregate amount of post-age 70½ contributions deducted that did not reduce the excludable portion of the QCDs for earlier taxable years. Thus, $6,000 of the aggregate amount of post-age 70½ contributions deducted does not apply for 2022 because that amount has reduced the excludable amount of QCDs for 2021. The remaining $4,000 of the aggregate amount of post-age 70½ contributions deducted reduces the excludable amount of any QCDs for subsequent taxable years. Accordingly, the excludable amount of the QCDs for 2022 is $2,500 ($6,500 – $4,000 = $2,500). As described above, because the $4,000 amount reduced the excludable amount of QCDs for 2022, that $4,000 amount does not apply again in later years, and no amount of post-age 70½ contributions remains to reduce the excludable amount of QCDs for later taxable years.<a href="#_ftn12">¹²</a></p><p><hr align="left" size="1" width="33%"></hr></p><p> <a href="#_ftnref1">1</a>. IRC § 408(d)(8), as amended. </p><p> <a href="#_ftnref2">2</a>. Notice 2007-7, 2007-1 C.B. 395, A-36. </p><p> <a href="#_ftnref3">3</a>. The American Taxpayer Relief Act of 2012, Pub. Law No. 112-240. </p><p> <a href="#_ftnref4">4</a>. Notice 2007-7, 2007-1 CB 395. </p><p> <a href="#_ftnref5">5</a>. IRC § 408(d)(8). </p><p> <a href="#_ftnref6">6</a>. IRC § 408(d)(8)(E). </p><p> <a href="#_ftnref7">7</a>. IRC § 408(d)(8)(D). </p><p> <a href="#_ftnref8">8</a>. IRC §§ 72, 408(d)(1). </p><p> <a href="#_ftnref9">9</a>. IRC § 408(d)(8), as amended. </p><p> <a href="#_ftnref10">10</a>. Notice 2007-7, 2007-1 CB 395. </p><p> <a href="#_ftnref11">11</a>. IRC § 408(d)(8)(A). </p><p> <a href="#_ftnref12">12</a>. Notice 2020-68. </p>

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<div class="Section1"><br /> <br /> <em>Editor&rsquo;s Note</em>: The SECURE Act now permits taxpayers to make contributions to traditional IRAs at any age.<br /> <br /> Although there was considerable confusion on this issue at one time, it now seems clear that rollovers may be made to traditional IRAs as long as the minimum distribution requirements are met ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3682">3682</a> to Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3698">3698</a>).<a href="#_ftn1" name="_ftnref1">¹</a> Rollovers, as well as contributions, may be made to Roth IRAs by individuals at any age.<br /> <br /> It appears that the same rationale also permits rollovers to qualified plans and Section 403(b) tax sheltered annuities after age 73 if minimum distribution requirements are met ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3892">3892</a> to Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3908">3908</a>, Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4075">4075</a> to Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4084">4084</a>).<br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp; Rev. Rul. 82-153, 1982-2 CB 86; Let. Rul. 9534027<em>. But see</em> Let. Rul. 8450068.<br /> <br /> </div></div><br />

<div class="Section1"><br /> <br /> Yes.<br /> <br /> Where any portion of an eligible distribution from a qualified plan is paid to the spouse of a participant after that participant&rsquo;s death, the spouse may make a rollover contribution of all or any part of that portion within 60 days of receipt.<a href="#_ftn1" name="_ftnref1">¹</a> The IRS is authorized to waive the 60-day rule under certain circumstances ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4016">4016</a>).<br /> <br /> A qualified plan, a traditional IRA, a Roth IRA ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3662">3662</a>), a tax sheltered annuity, or an eligible Section 457 governmental plan that agrees to separately account for funds received from any eligible retirement plan except another eligible Section 457 governmental plan is treated as an eligible retirement plan with respect to a surviving spouse.<a href="#_ftn2" name="_ftnref2">²</a> In other words, a surviving spouse may roll over an eligible distribution into his or her own plan account, provided the plan accepts rollover contributions.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> The other rules applicable to rollovers in general apply to rollovers by a deceased participant&rsquo;s spouse ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4000">4000</a>, Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4001">4001</a>, Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4004">4004</a>, Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4007">4007</a>, Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4016">4016</a>).<a href="#_ftn4" name="_ftnref4">⁴</a> Thus, unless a spouse elects the direct rollover option, the distribution will be subject to mandatory withholding at 20 percent ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4004">4004</a>).<br /> <br /> Because the surviving spouse of an owner of a traditional IRA is not subject to the inherited account rules, the surviving spouse may make rollovers to and from the plan.<a href="#_ftn5" name="_ftnref5">⁵</a> This generally has held true whether the spouse was the beneficiary designated under the plan or inherited the account as sole beneficiary of the owner&rsquo;s estate.<a href="#_ftn6" name="_ftnref6">⁶</a> Under regulations proposed in 2022, spousal beneficiaries will also be required to elect to treat the deceased spouse&rsquo;s IRA as their own by the later of (1) December 31 of the year following the year of the owner&rsquo;s death or<br /> (2) the individual&rsquo;s required beginning date (73 in 2023-2032, 72 in 2020-2022).<br /> <br /> Furthermore, a proper rollover was considered made by a surviving spouse who, as her deceased husband&rsquo;s executrix, transferred the right to receive the benefits due her husband from his profit sharing plan to herself under the residuary bequest in the husband&rsquo;s will and then transferred this amount into an IRA already established on her behalf.<a href="#_ftn7" name="_ftnref7">⁷</a><br /> <br /> In a number of private rulings during the 1990s, the IRS stated that if a decedent&rsquo;s IRA or tax sheltered annuity passed through a third party, such as a trust, and then was distributed to the decedent&rsquo;s surviving spouse, the spouse was treated as acquiring the IRA or tax sheltered annuity from the trust rather than from the decedent; thus, no rollover was possible.<a href="#_ftn8" name="_ftnref8">⁸</a><br /> <br /> The IRS also determined on several occasions that if the trustee had no discretion as to the allocation of IRA proceeds to a trust or the payment of the proceeds directly to the surviving spouse, the surviving spouse would be treated as having acquired the IRA proceeds from the decedent rather than from the trust. In other words, a rollover was possible.<a href="#_ftn9" name="_ftnref9">⁹</a><br /> <br /> In numerous rulings, the IRS has treated a surviving spouse as having acquired the IRA from the decedent and not the trust where the surviving spouse had the power to revoke the trust.<a href="#_ftn10" name="_ftnref10">¹⁰</a><br /> <br /> The preamble to the 2002 final regulations under IRC Section 401(a)(9) ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3892">3892</a>) clarifies that if a surviving spouse receives a distribution from a deceased spouse&rsquo;s IRA, the spouse is permitted to roll that distribution over within 60 days into an IRA in the spouse&rsquo;s own name to the extent that the distribution is not a required distribution, regardless of whether or not the spouse is the sole beneficiary of the IRA owner.<a href="#_ftn11" name="_ftnref11">¹¹</a> In other words, it appears that for rollover purposes, the final regulations were intended to put to rest the distinction between trusts that provide discretion to the surviving spouse and those that do not.<br /> <br /> The surviving spouse does not receive a stepped up basis with respect to the decedent&rsquo;s plan interest or tax sheltered annuity, as retirement benefits are treated as income in respect of a decedent.<a href="#_ftn12" name="_ftnref12">¹²</a><br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp; IRC &sect; 402(c)(9).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp; IRC &sect;&sect; 402(c)(9), 402(c)(10).<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp; Treas. Reg. &sect; 1.402(c)-2, A-11.<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp; IRC &sect;&sect; 402(c)(9), 403(a)(4), 403(b)(8).<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.&nbsp; IRC &sect; 408(d)(3)(C).<br /> <br /> <a href="#_ftnref6" name="_ftn6">6</a>.&nbsp; <em>See, e.g.,</em> Let. Ruls. 9820010, 9502042, 9402023, 8925048.<br /> <br /> <a href="#_ftnref7" name="_ftn7">7</a>.&nbsp; Let. Rul. 9351041.<br /> <br /> <a href="#_ftnref8" name="_ftn8">8</a>.&nbsp; <em>See, e.g</em>., Let. Ruls. 9515041, 9427035, 9416045.<br /> <br /> <a href="#_ftnref9" name="_ftn9">9</a>.&nbsp; <em>See, e.g.,</em> Let. Ruls. 200324059, 9813018, 9649045, 9533042, 9445029, 201430026, 201430029.<br /> <br /> <a href="#_ftnref10" name="_ftn10">10</a>.&nbsp; Let. Ruls. 199910067, 9815050, 9721028, 9427035.<br /> <br /> <a href="#_ftnref11" name="_ftn11">11</a>.&nbsp; TD 8987, 67 Fed. Reg. 18988 (4-17-02).<br /> <br /> <a href="#_ftnref12" name="_ftn12">12</a>.&nbsp; IRC &sect; 691; Treas. Reg. &sect;1.691(a)-1.<br /> <br /> </div></div><br />

<div class="Section1"><br /> <br /> Once a distribution eligible for rollover treatment is received by a participant, the participant must make the rollover contribution within 60 days.<a href="#_ftn1" name="_ftnref1">¹</a> If more than one distribution is received by an employee from a qualified plan during a taxable year, the 60-day rule applies separately to each distribution.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> The IRS has the authority to waive the 60-day requirement where failure to waive it would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to the requirement.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> The IRS has issued guidelines for requesting a waiver of the 60-day requirement.<a href="#_ftn4" name="_ftnref4">⁴</a> Under the guidelines, a taxpayer may request a private letter ruling from the IRS waiving a failure to meet the 60-day requirement. The IRS will consider &ldquo;all relevant facts and circumstances,&rdquo; such as whether financial institutions committed any errors; whether an incomplete rollover was due to death, disability, hospitalization, incarceration, or postal error; how an amount distributed was used by the taxpayer, including whether a check was cashed; and how much time has elapsed since the distribution. The guidelines grant automatic waivers in cases where the failure to timely complete a rollover is &ldquo;solely due to an error on the part of the financial institution.&rdquo; If the taxpayer followed the institution&rsquo;s required procedures within the 60-day rollover period, and the error is ultimately corrected within one year of the distribution, no waiver request is necessary.<br /> <br /> The IRS has liberally applied the new guidelines, granting waivers for alcohol and drug treatment, blizzards, bank errors, dementia, health problems, hurricanes, mistakes of fact including confusing an IRA distribution for a life insurance or annuity payment, and mistakes of law including not understanding the tax consequences of the distribution.<a href="#_ftn5" name="_ftnref5">⁵</a> The IRS has denied waivers where a taxpayer used a distribution as a short term loan and made no actual attempt to roll over the distribution within the 60-day limit.<a href="#_ftn6" name="_ftnref6">⁶</a><br /> <br /> Prior to EGTRRA 2001, no waivers of the 60-day time limit were permitted, even where the failure to meet it was the result of mistake, erroneous advice, the inaction of third parties, or reliance on prior rulings by the IRS itself.<a href="#_ftn7" name="_ftnref7">⁷</a><br /> <br /> Where a stock certificate representing the participant&rsquo;s distribution was sent by registered mail but the participant was away from home, the 60-day period did not begin until the taxpayer signed the registered mail claim check at the post office and took physical receipt of the stock distribution.<a href="#_ftn8" name="_ftnref8">⁸</a> Likewise, the 60-day period began on the taxpayer&rsquo;s receipt of a distribution check even though the check had been issued ten months earlier but delivery was delayed because of an incorrect address.<a href="#_ftn9" name="_ftnref9">⁹</a><br /> <br /> The 60-day period does not include any period during which the amount transferred to the individual is a frozen deposit that cannot be withdrawn because of the bankruptcy or insolvency of the financial institution or any state-imposed requirement based on the bankruptcy or insolvency or threat of bankruptcy or insolvency of institutions in the state. Also, the 60-day period will not be considered to expire any earlier than ten days after the account ceases to be frozen.<a href="#_ftn10" name="_ftnref10">¹⁰</a><br /> <br /> The inclusion of a distribution as income is not deferred into another calendar year merely because the 60-day rollover period extends into the succeeding year.<a href="#_ftn11" name="_ftnref11">¹¹</a><br /> <br /> A timely rollover occurred where a corrective bookkeeping entry was made after the 60-day period but, based on the facts of the case; the Tax Court concluded that the transfer itself actually had occurred within the required period.<a href="#_ftn12" name="_ftnref12">¹²</a><br /> <br /> A letter ruling waived the 60-day rollover period for transfers between IRAs where a financial institution was closed on the sixtieth day, a Sunday, and the rollover was completed on the following day.<a href="#_ftn13" name="_ftnref13">¹³</a> <em>See</em> Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4017">4017</a> for a discussion of the new self-certification process that can allow taxpayers to obtain a waiver of the 60-day time limit.<br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp; IRC &sect; 402(c)(3).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp; Treas. Reg. &sect; 1.402(c)-2, A-11.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp; IRC &sect; 402(c)(3)(B).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp; Rev. Proc. 2003-16, 2003-1 CB 359.<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.&nbsp; Let. Ruls. 200611038, 200610025, 200606053, 200606052.<br /> <br /> <a href="#_ftnref6" name="_ftn6">6</a>.&nbsp; Let. Ruls. 200544027, 200544030.<br /> <br /> <a href="#_ftnref7" name="_ftn7">7</a>.&nbsp; <em>See, e.g.,</em> Orgera v. Comm., TC Memo 1995-575; Let. Ruls. 9826036, 9211035, 9145036.<br /> <br /> <a href="#_ftnref8" name="_ftn8">8</a>.&nbsp; Let. Rul. 8804014.<br /> <br /> <a href="#_ftnref9" name="_ftn9">9</a>.&nbsp; Let. Rul. 8833043.<br /> <br /> <a href="#_ftnref10" name="_ftn10">10</a>.&nbsp; IRC &sect;&sect; 402(c)(7)(A), 403(a)(4)(B), 403(b)(8)(B), 408(d)(3)(F), 457(e)(16)(B).<br /> <br /> <a href="#_ftnref11" name="_ftn11">11</a>.&nbsp; Robinson v. Comm., TC Memo 1996-517.<br /> <br /> <a href="#_ftnref12" name="_ftn12">12</a>.&nbsp; Wood v. Comm., 93 TC 114 (1989).<br /> <br /> <a href="#_ftnref13" name="_ftn13">13</a>.&nbsp; Let. Rul. 200930052.<br /> <br /> </div></div><br />

<div class="Section1"><br /> <br /> Yes.<br /> <br /> The Pension Benefit Guaranty Corporation (PBGC) has issued rules that are designed to encourage taxpayers to roll amounts from defined contribution plans into defined benefit plans by clarifying the protection that these funds would receive should the defined benefit plan be terminated and become subject to PBGC control.<br /> <br /> Typically, the PBGC guarantees the payment of non-forfeitable pension benefits up to a statutory maximum that is adjusted each year. Further, if the plan's benefit increase has been effective for fewer than five years, the percentage of the benefit that is guaranteed is phased-in over a five-year period, becoming fully guaranteed only after five years.<br /> <br /> Under the PBGC rules, amounts rolled from a defined contribution plan into a defined benefit plan will not be subject to the maximum guaranteed benefit limitations or the otherwise applicable five-year phase-in limitations. This will provide taxpayers with greater assurance that their defined contribution plan funds will be protected if they are rolled over into a defined benefit plan.<a href="#_ftn1" name="_ftnref1">¹</a><br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.  29 CFR Pts. 4001, 4022, 4044; 79 FR 70090.<br /> <br /> </div>

<div class="Section1"><br /> <br /> A required minimum distribution from an IRA is not eligible for rollover. If a minimum distribution is required for a calendar year, any amounts distributed during a calendar year from an IRA are first treated as the required minimum distribution for the year.<br /> <br /> <hr /><br /> <br /> <strong>Planning Point:</strong> The portion of a distribution that is a required minimum distribution from an IRA, and so not eligible for rollover, is determined in the same manner as provided for distributions from qualified plans. For example, if a minimum distribution is required under IRC Section 401(a)(9) for a calendar year, an amount distributed during a calendar year from an IRA is treated as a required minimum distribution to the extent that the total required minimum distribution for the year under Section 401(a)(9) for that IRA has not been satisfied.<a href="#_ftn1" name="_ftnref1">¹</a><br /> <br /> <hr /><br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.  Treas. Reg. § 1.408-8, A-4.<br /> <br /> </div>

<div class="Section1"><br /> <br /> In the past, an individual was required to obtain a private letter ruling from the IRS in order to obtain a waiver of the 60-day time limit on retirement plan rollovers, as discussed in Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4016">4016</a>. The IRS has now developed a process designed to help individuals who receive retirement plan distributions, but miss the 60-day deadline. Revenue Procedure 2016-47 contains a self-certification process that can allow these individuals to qualify for a waiver of the time limit and potential penalties if one or more of 11 potential circumstances apply.<br /> <br /> Some of the circumstances that can qualify a taxpayer for a waiver via self-certification include the following:<br /> <p style="padding-left: 40px;">(1)&nbsp; An error was committed by the financial institution receiving the contribution or making the distribution to which the contribution relates.</p><br /> <p style="padding-left: 40px;">(2)&nbsp; The distribution check was misplaced and never cashed.</p><br /> <p style="padding-left: 40px;">(3)&nbsp; The taxpayer&rsquo;s principal residence was severely damaged.</p><br /> <p style="padding-left: 40px;">(4)&nbsp; A member of the taxpayer&rsquo;s family died.</p><br /> <p style="padding-left: 40px;">(5)&nbsp; The taxpayer or a member of his or her family was severely ill.</p><br /> <p style="padding-left: 40px;">(6)&nbsp; A postal error occurred.</p><br /> <p style="padding-left: 40px;">(7)&nbsp; Restrictions were imposed by a foreign country.</p><br /> <p style="padding-left: 40px;">(8)&nbsp; The distribution was deposited into and remained in an account that the taxpayer mistakenly believed was an eligible retirement plan.</p><br /> <p style="padding-left: 40px;">(9)&nbsp; The taxpayer was incarcerated.</p><br /> <p style="padding-left: 40px;">(10)&nbsp; The distribution was made on account of a levy under IRC Section 6331 and the proceeds of the levy have been returned to the taxpayer.</p><br /> <p style="padding-left: 40px;">(11)&nbsp; The party making the distribution to which the rollover relates delayed providing information that the receiving plan or IRA required in order to complete the rollover, despite the taxpayer&rsquo;s reasonable efforts to obtain that information.</p><br /> <p style="padding-left: 40px;">(12)&nbsp; The distribution was made to a state unclaimed property fund.<a href="#_ftn1" name="_ftnref1">¹</a></p><br /> The rollover must be made as soon as practicable after the reason that prevented the rollover no longer applies (a 30-day safe harbor period exists).<br /> <br /> The IRS has provided a form certification letter that may be used word for word (or a substantially similar letter may be used) and provided to the plan administrator or IRA trustee. The plan administrator or IRA trustee may rely on the taxpayer&rsquo;s self-certification unless he or she has actual knowledge that the self-certification is false. The IRS may still determine that the taxpayer does not qualify for a waiver, but the taxpayer is entitled to report the contribution as a valid rollover unless it is informed otherwise by the IRS.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp; Rev. Proc. 2020-46.<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp; Rev. Proc. 2016-47.<br /> <br /> </div></div><br />

<div class="Section1"><br /> <br /> Yes.<br /> <br /> Beginning for distributions in 2008, a non-spouse designated beneficiary of a qualified plan, a tax sheltered annuity, or an eligible Section 457 governmental plan may make a direct rollover into an inherited IRA, including a Roth IRA ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3662">3662</a>).<a href="#_ftn1" name="_ftnref1">¹</a> The rollover must be made by means of a trustee-to-trustee transfer. The transfer will be treated as an eligible rollover distribution.<a href="#_ftn2" name="_ftnref2">²</a> Distributions to non-spouse beneficiaries prior to 2008 were not eligible rollover distributions.<br /> <br /> An inherited IRA created under this provision must remain in the name of the owner of the original retirement account payable to the designated beneficiary. The IRA is subject to required minimum distributions as for any IRA payable to a designated beneficiary ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3687">3687</a>).<br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp; Notice 2008-30, 2008-1 CB 638, A-7.<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp; IRC &sect; 402(c)(11).<br /> <br /> </div></div><br />

<div class="Section1"><br /> <br /> No.<a href="#_ftn1" name="_ftnref1">¹</a><br /> <br /> Where a plan participant received a distribution from a qualified retirement plan and, within 60 days, the funds were placed in a traditional IRA held in the participant&rsquo;s wife&rsquo;s name only, but not pursuant to a valid QDRO ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="4005">4005</a>), the Tax Court found that a valid rollover had not occurred.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp; News Release IR-1809, Q17, 5-9-77; IRC &sect; 408(d)(3)(A).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp; Rodoni v. Comm., 105 TC 29 (1995).<br /> <br /> </div></div><br />