Presentación de Resultados de la Encuesta

An IRA accountholder is authorized to take a distribution from his or her IRA and roll it over once per year. Although the statutory law could be read that a person with multiple IRA plan agreements is allowed to do only one rollover per year, the IRS has adopted the rule administratively that a person may do one rollover per year per plan agreement.

A person who only has one plan agreement comprised of 5 different CDs is permitted to do only one rollover per year. In contrast, a person with 5 different IRA plan agreements, would be eligible to do a rollover within one

year from each of the five plan agreements.

The Once Per Year Rule

It is permissible for the IRA accountholder to make multiple Rollover contributions of the one IRA distribution.

Example. John withdraws $15,000 from his IRA on March 20, 2012. He makes three $5,000 rollover contributions, one on April 2, one on April 18th _{and one}

on May 10, 2012. The three rollover contributions are permissible since they relate to the one distribution.

The Once Per Year Rule

Example # 1: A person who took a distribution April 20, 2011, and rolled it over within the 60 day limit, is eligible to rollover a subsequent distribution from the same IRA only if such distribution occurs on April 20, 2012 or later. Example # 2: A person is authorized to rollover one distribution in a one year period. A person who withdraws $3,000 on May 11 and then withdraws $15,000 on May 25 from the same IRA, will have to decide which of the two distributions to rollover since only one rollover per year is authorized.

There is an exception for bank closure. An additional rollover is permitted.

Rollovers are reportable to the IRS

• Distributions on Form 1099-R

Regular IRA reporting codes

• Rollover contributions on Form 5498

Box 2

Procedures - Current IRA Custodian/Trustee

• Complete distribution form as any other distribution

• Complete withholding documentation when applicable

• Check/Draft/Wire is made payable to or for the IRA accountholder

• Document and Report as any IRA distribution

Regular IRA distribution codes

CWF Form # 57

CWF Form # 57-R

IRA-to-IRA Rollovers

Complete distribution form as any other distribution

Federal Income tax withholding rules apply to the distribution · State Income tax withholding rules may also apply

· Traditional/SEP/SIMPLE IRA required minimum distributions

(RMDs) CANNOT be rolled over

Procedures - Subsequent IRA Custodian/Trustee · Could be current or new IRA custodian/trustee

· Proper IRA must be established to receive rollover

· Plan agreement, Disclosure statement, Financial disclosure with

financial projection (when applicable), using the Rollover projection

calculation

· Document irrevocable rollover election · Document rollover contribution

Procedures - Subsequent IRA Custodian/Trustee

• Could be current or new IRA custodian/trustee

• Proper IRA must be established to receive rollover Plan Agreement,

Disclosure Statement, Financial Disclosure with financial projection

(when applicable), using the rollover projection calculation

• Document irrevocable rollover election

CWF Form # 65

CWF Form # 65-R2

Procedures - Subsequent IRA Custodian/Trustee

IRA-to-IRA Rollovers

Requirements

• Traditional/SEP/SIMPLE IRA required minimum distributions

• RMDs CANNOT be rolled over, must be satisfied first

• Rollover election must be irrevocable

• Document carefully

Example: Lynn is age 74. She has established a periodic distribution where her RMD is paid to her checking account in November of each year.

Her RMD for 2012 is $600. On March 20, 2012 she needs funds to pay

her property taxes. She withdraws $1,500. She wants to rollover the entire $1,500. She may only Rollover $900. She will not need to take her November distribution.

Rollover

CWF

Form # 54 CWF

Form # 54-R

Spouse Beneficiary Exception

Inherited IRA distribution to spouse beneficiary is eligible for rollover to spouse beneficiary’s own IRA less any RMD.

Same 60-Day rule applies

Special Waiver to 60-Day Rule issued in writing by IRS

· Request Waiver from IRS

· IRA owner hardships beyond reasonable control

Against equity, good conscience, casualty, disaster, death,

disability, hospitalization, incarceration, foreign country

restriction, or postal error

· Waiver must be requested and received by the IRA owner BEFORE completing rollover.

· IRA custodian/trustee should receive copy of approved waiver

· Report and document as any other rollover

Note: Do not accept rollover without the IRS approved waiver.

·

· No Special Waiver Required

· Custodian/Trustee error

· Must have received rollover assets timely

· As usual rollover documentation completed timely · IRA timely established for rollover

· Must be within one year of distribution

If bank error is not discovered and corrected within the one year time period, the IRS filing procedure would need to be used to correct the situation.

Failed Rollovers and Non-qualifying Rollover

A failed rollover exists when the funds never went into an IRA. This means the distribution received by the accountholder or beneficiary is taxable.

A non-qualifying rollover exists when the funds did not qualify to go into the IRA via a rollover. It is an excess contribution. The 6% tax will apply unless timely corrected.

Standard Rollover Rules Apply:

• Once per year

• 60 Day Rule

• No RMD rule