Course: Income Tax Planning
Lesson 1: Using IRAs to Build and Distribute More Retiremnt Income

Student Question:

Is it okay to roll over ( via direct trustee, not 60day) from Traditional to Roth several times throughout the year if needed?



Instructor Response:

Great question Matt.

The IRS limits tax-free IRA rollovers to one per taxpayer per year.

  • The reason for the rule is a Tax Court ruling that eliminated a taxpayer’s ability to take a series of 60-day rollovers from the same IRA to serve an an extended series of 60-day interest-free loans.
  • Examples of tax-free rollovers include Roth to Roth or Traditional to Traditional.

The IRS does not limit the following:

  • Traditional IRA to Roth IRA rollovers – this creates gross income and the IRS seldom discourages more taxes!
  • IRA to IRA direct trustee-to-trustee transfers