Page 85 - 2020 Publication 17

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Inherited from someone other than spouse. • An employer's qualified retirement plan for The 1-year period begins on the date you re-
If you inherit a traditional IRA from anyone other its employees. ceive the IRA distribution, not on the date you
than your deceased spouse, you can't treat the • A deferred compensation plan of a state or roll it over into an IRA. Rules apply to the num-
inherited IRA as your own. This means that you local government (section 457 plan). ber of rollovers you can have with your tradi-
can't make any contributions to the IRA. It also tional IRAs. See Application of one-rollover limi-
means you can't roll over any amounts into or • A tax-sheltered annuity plan (section tation next.
out of the inherited IRA. However, you can 403(b) plan).
make a trustee-to-trustee transfer as long as the Application of one-rollover limitation. You
can make only one rollover from an IRA to an-
IRA into which amounts are being moved is set
up and maintained in the name of the deceased Treatment of rollovers. You can't deduct a other (or the same) IRA in any 1-year period, re-
gardless of the number of IRAs you own. The
IRA owner for the benefit of you as beneficiary. rollover contribution, but you must report the limit applies by aggregating all of an individual's
For more information, see the discussion of rollover distribution on your tax return as dis- IRAs, including SEP and SIMPLE IRAs, as well
Inherited IRAs under Rollover From One IRA cussed later under Reporting rollovers from as traditional and Roth IRAs, effectively treating
Into Another, later. IRAs and Reporting rollovers from employer
plans. them as one IRA for purposes of the limit. How-
ever, trustee-to-trustee transfers between IRAs
Can You Move Retirement Rollover notice. A written explanation of aren't limited and rollovers from traditional IRAs
Plan Assets? rollover treatment must be given to you by the to Roth IRAs (conversions) aren't limited.
plan (other than an IRA) making the distribution.
You can transfer, tax free, assets (money or See Written explanation to recipients in Pub. Example. John has three traditional IRAs:
property) from other retirement plans (including 590-A. IRA-1, IRA-2, and IRA-3. John didn't take any
distributions from his IRAs in 2020. On January
traditional IRAs) to a traditional IRA. You can Kinds of rollovers from a traditional IRA.
make the following kinds of transfers. You may be able to roll over, tax free, a distribu- 1, 2021, John took a distribution from IRA-1 and
rolled it over into IRA-2 on the same day. For
• Transfers from one trustee to another. tion from your traditional IRA into a qualified 2021, John can't roll over any other 2020 IRA
• Rollovers. plan. These plans include the federal Thrift Sav- distribution, including a rollover distribution in-
ings Plan (for federal employees), deferred
volving IRA-3. This wouldn’t apply to a
• Transfers incident to a divorce. compensation plans of state or local govern- trustee-to-trustee transfer or a Roth IRA conver-
Transfers to Roth IRAs. Under certain condi- ments (section 457 plans), and tax-sheltered sion.
tions, you can move assets from a traditional annuity plans (section 403(b) plans). The part of Partial rollovers. If you withdraw assets from
IRA or from a designated Roth account to a the distribution that you can roll over is the part a traditional IRA, you can roll over part of the
Roth IRA. You can also move assets from a that would otherwise be taxable (includible in withdrawal tax free and keep the rest of it. The
qualified retirement plan to a Roth IRA. See your income). Qualified plans may, but aren't amount you keep will generally be taxable (ex-
Can You Move Amounts Into a Roth IRA? under required to, accept such rollovers. cept for the part that is a return of nondeductible
Roth IRAs, later. Time limit for making a rollover contribu- contributions). The amount you keep may be
tion. You must generally make the rollover subject to the 10% additional tax on early distri-
Trustee-to-Trustee Transfer contribution by the 60th day after the day you butions, discussed later under What Acts Re-
receive the distribution from your traditional IRA
A transfer of funds in your traditional IRA from or your employer's plan. sult in Penalties or Additional Taxes.
one trustee directly to another, either at your re- The IRS may waive the 60-day requirement Required distributions. Amounts that must
quest or at the trustee's request, isn't a rollover. where the failure to do so would be against be distributed during a particular year under the
This includes the situation where the current equity or good conscience, such as in the event required minimum distribution rules (discussed
trustee issues a check to the new trustee, but of a casualty, disaster, or other event beyond later) aren't eligible for rollover treatment.
gives it to you to deposit. Because there is no your reasonable control. For more information, Inherited IRAs. If you inherit a traditional IRA
distribution to you, the transfer is tax free. Be- see Can You Move Retirement Plan Assets? in from your spouse, you can generally roll it over,
cause it isn't a rollover, it isn't affected by the chapter 1 of Pub. 590-A. or you can choose to make the inherited IRA
1-year waiting period required between roll- your own. See Treating it as your own, earlier.
overs, discussed later under Rollover From One Extension of rollover period. If an amount
IRA Into Another. For information about direct distributed to you from a traditional IRA or a Not inherited from spouse. If you inherit a
transfers to IRAs from retirement plans other qualified employer retirement plan is a frozen traditional IRA from someone other than your
than IRAs, see Can You Move Retirement Plan deposit at any time during the 60-day period al- spouse, you can't roll it over or allow it to re-
Assets? in chapter 1 and Can You Move lowed for a rollover, special rules extend the ceive a rollover contribution. You must withdraw
Amounts Into a Roth IRA? in chapter 2 of Pub. rollover period. For more information, see Can the IRA assets within a certain period. For more
590-A. You Move Retirement Plan Assets? in chapter 1 information, see When Must You Withdraw As-
of Pub. 590-A. sets? (Required Minimum Distributions) in
Rollovers chapter 1 of Pub. 590-B.
Generally, a rollover is a tax-free distribution to Rollover From One IRA Into Reporting rollovers from IRAs. Report any
rollover from one traditional IRA to the same or
you of cash or other assets from one retirement Another another traditional IRA on Form 1040 or
plan that you contribute (roll over) to another re- You can withdraw, tax free, all or part of the as- 1040-SR as follows.
tirement plan. The contribution to the second sets from one traditional IRA if you reinvest Enter the total amount of the distribution on
retirement plan is called a “rollover contribu- them within 60 days in the same or another tra- Form 1040 or 1040-SR, line 4a. If the total
tion.” ditional IRA. Because this is a rollover, you can't amount on Form 1040 or 1040-SR, line 4a, was
Note. An amount rolled over tax free from deduct the amount that you reinvest in an IRA. rolled over, enter zero on Form 1040 or
1040-SR, line 4b. If the total distribution wasn't
one retirement plan to another is generally in- Waiting period between rollovers. Gener- rolled over, enter the taxable portion of the part
cludible in income when it is distributed from the ally, if you make a tax-free rollover of any part of that wasn't rolled over on Form 1040 or
second plan. a distribution from a traditional IRA, you can't, 1040-SR, line 4b. Enter “Rollover” next to Form
Kinds of rollovers to a traditional IRA. You within a 1-year period, make a tax-free rollover 1040 or 1040-SR, line 4b. For more information,
of any later distribution from that same IRA. You
can roll over amounts from the following plans also can't make a tax-free rollover of any see the Instructions for Forms 1040 and
into a traditional IRA. amount distributed, within the same 1-year pe- 1040-SR.
• A traditional IRA. riod, from the IRA into which you made the If you rolled over the distribution into a quali-
tax-free rollover. fied plan (other than an IRA) or you make the

Chapter 9 Individual Retirement Arrangements (IRAs) Page 81