Friday, February 21, 2014
In Bobrow v. Commissioner, the Tax Court recently held that the one-rollover-per-year rule (Section 408(d)(3)(B)) applies to all of a taxpayer’s IRAs rather than each separately.
This ruling conflicts with Publication 590, which states that a taxpayer with two IRAs can withdraw money from the first IRA and roll over the withdrawal into the same IRA or a new IRA within 60 days; the taxpayer can then, later that same year, make a withdrawal from the second IRA and rollover the withdrawal into an IRA within 60 days (as long as the IRA isn’t the first IRA or the IRA that received the first rollover).
The Tax Court concluded that no matter how many accounts a taxpayer has, only one rollover was permitted during any 12-month period.
See Grant Thornton’s Washington National Tax Office, United States: Tax Court Rules on IRA Rollovers, Mondaq, Feb. 16, 2014.