New Proposed Regulation Limiting IRA Rollovers

​New proposed regulation from IRS limiting IRA rollovers to be issued January 1, 2015. Distributions from an IRA are generally included in a taxpayer’s gross income for the year. IRC 408(d)(1). However, if during the year the taxpayer “rolls” the amount distributed (or a portion thereof) to a qualified IRA (or retirement plan) within 60 days of the taxpayer’s receipt of such distribution then the amount rolled over into the IRA is excluded from the taxpayer’s gross income, provided the taxpayer does this only once during the calendar year. IRC 408(d)(3)(B). Prior to the new proposed regulation, it was believed that the one rollover per year applied to each IRA owned by the taxpayer. The IRS is issuing a new proposed regulation effective January 1, 2015, clarifying that the one-time per year rollover applies to all IRAs owned by the taxpayer in aggregate and not on a per IRA basis. This new regulation does not affect the number of trustee-to-trustee transfers of an IRA.


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