Course: Income Tax Planning
Lesson 1: Using IRAs to Build and Distribute More Retiremnt Income
Is it okay to roll over ( via direct trustee, not 60–day) from Traditional to Roth several times throughout the year if needed?
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