IRA rollovers and transfers

Broker-to-broker IRA transfer

An IRA transfer occurs when a broker from one institution moves all or part of the client’s IRA from that institution to another. This will normally be shown as a Code G on the 1099-R.

Reporting the transfer in TaxSlayer

  • Enter the 1099-R showing the distribution from the IRA being transferred
  • Do not check the rollover box.

Client IRA rollover

An IRA rollover occurs when a client receives funds from their IRA and re-deposits the funds into the same or another IRA within 60 days. This is normally shown as a Code 2 or 7 and tax may be withheld.

  • Prior to 1/1/2015, the client can make one rollover per year for each of their IRA accounts.
  • Beginning with 1/1/2015, only one rollover per year can be made, no matter how many IRA accounts there are.
  • It may be possible to avoid the 60 day limit penalty. See this IRS bulletin for the process. Conditions are:
    1. No prior denial by the IRS.
    2. Reason for missing 60-day deadline:
      1. an error was committed by the financial institution receiving the contribution or making the distribution to which the contribution relates;
      2. the distribution, having been made in the form of a check, was misplaced and never cashed;
      3. the distribution was deposited into and remained in an account that the taxpayer mistakenly thought was an eligible retirement plan;
      4. the taxpayer’s principal residence was severely damaged;
      5. a member of the taxpayer’s family died;
      6. the taxpayer or a member of the taxpayer’s family was seriously ill;
      7. the taxpayer was incarcerated;
      8. restrictions were imposed by a foreign country;
      9. a postal error occurred;
      10. the distribution was made on account of a levy under § 6331 and the proceeds of the levy have been returned to the taxpayer; or
      11. the party making the distribution to which the rollover relates delayed providing information that the receiving plan or IRA required to complete the rollover despite the taxpayer’s reasonable efforts to obtain the information.
    3. Contribution as soon as practicable; 30-day safe harbor. The contribution must be made to the plan or IRA as soon as practicable after the reason or reasons listed in the preceding paragraph no longer prevent the taxpayer from making the contribution.

Reporting the rollover in TaxSlayer

  • Enter the 1099-R showing the distribution from the IRA being rolled over
  • If a rollover, a taxable amount may be shown on the 1099-R. TaxSlayer will not allow the full amount to be rolled over if the tax withheld is entered. If all is being rolled over:
    • Enter the 1099-R as a Code G, $0 taxable and no withholding.
    • Enter the withheld amount in Payments & Estimates > Other Federal Withholding.