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Are you looking to, or considering, moving funds or assets from one custodian or another? Here are a few things to know about transferring an ira from one financial institution to another.
What is a rollover?
A rollover is when a person requests a personal distribution from his or her account and then redeposits, or “rolls,” the money into a like-tax-environment account.
Taxes and penalties can be avoided if the distributed funds are deposited into a like account within 60 days from the date of distribution. The IRS allows one IRA rollover in any 12-month period – per person, not per IRA.
It’s important to remember the 12-month period begins on the date a person receives the IRA distribution – not on the date it is rolled back into an IRA.
What is a transfer?
A person can complete a transfer if he or she holds an IRA at another financial institution and would like to move to an Equity Trust account.
Transferring funds from one custodian to another is a nontaxable event – providing the account types are the same tax environment.
[Related: Guide to self-directed accounts and taxes]