Rollover IRA and IRA Transfers
The movement of IRA funds directly from one IRA provider to another without the IRA owner taking receipt of the funds. This transaction is sometimes referred to as a custodian-to-custodian transfer. IRA holders can perform as many of these transfers as they would like.
How Does it Work?
The client completes a New Direction IRA transfer form and mails it, with a recent statement from the client's current IRA, to our office. NDIRA completes the form and mails it to the client's current provider who would then send the funds specified on the Transfer form to the client's NDIRA account. This will achieve a custodian-to-custodian transfer and is NOT a reportable event for the IRS. Typically, the client needs to liquidate publicly-traded securities assets at their current provider prior to the transfer.
IRA Rollover and Transfers
In-Kind Asset Transfers
— Custodian-to-custodian transfers to NDIRA may be cash and/or assets themselves (e.g. real estate, gold, notes, etc.). In-kind transfer is the name given to the movement of non-cash assets. This process generally involves the asset being re-titled to indicate that the asset is now part of the client's NDIRA account. The re-titled documents are sent to NDIRA to be placed in the vault. In the case of precious metals, the assets are moved to a depository account titled in the name of the client's NDIRA account.
— A rollover usually refers to the movement of IRA funds from one IRA provider or qualified retirement plan (401(k), 403(b), defined benefit plan, and more) to the account owner, who then deposits the funds into a new IRA with another IRA provider. The account owner has 60 calendar days to complete this move. If the process is not complete within 60 days the value of the cash and/or assets are considered a taxable distribution of funds.
Beginning as early as January 1, 2015, you can make only one rollover
from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own (Announcement 2014-15). You can, however, continue to make as many trustee-to-trustee transfers between IRAs as you want. You can also make as many rollovers from traditional IRAs to Roth IRAs ("conversions") as you want.
Rollovers are reported to the IRS, but, performed properly, they are not a taxable event. For some providers, tax withholding on distributions is part of their normal procedure; so, if the distribution is intended to be rolled over, it is the client's responsibility to contact the provider to make sure that no taxes are withheld.
It is often possible for the account holder to arrange a direct rollover
. With a direct rollover, the current provider writes a check to or sends a wire to your NDIRA account directly. The funds never go to the account holder; so, there is no need for the current provider to take withholding. Also, this may speed up the process of funding your NDIRA account.
Note: This process often take several weeks or longer to complete.