Answer

Updated to reflect new rules on IRA-to-IRA Rollovers

Confusion between what is a rollover and what is a transfer is a common occurrence. And, the related official guidance and tax laws sometimes add to the confusion as they often use the word ‘trustee-to-trustee-transfer’ when referring to https://iradictionary.com/directrollover direct-rollovers , and other https://iradictionary.com/definitions/reportable reportable transactions where the assets are moved directly between two financial institutions or two retirement accounts. Financial institutions typically use the term rollover, when referring to distributions (reportable on IRS https://iradictionary.com/definitions/221/form1099rorirsform1099r Form 1099-R) that are credited to eligible retirement accounts as rollover contributions, and they usually use the term ‘transfer’ when referring to non-reportable movement of assets between retirement accounts.

The person who told you about the once-per 12-month rule was likely referring to the rule that applies to distributions and rollover contributions that occur between IRAs. Under this rule, an individual who rolls-over a distribution from an IRA to another IRA (IRA-to-IRA-Rollover), may generally not perform another IRA-to-IRA-Rollover during the following 12-month period. The 12-month period begins on the day the IRA owner receives the distribution. http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000408—-000-.html [IRC Sec. 408(d)(3)(B)]. Additional information about limitations on rollovers between IRAs is available in IRS Publication 590A, available at www.irs.gov.

Movement of assets from your https://iradictionary.com/definitions/qualifiedretirementplan qualified plan to your IRA is always a distribution from the qualified plan and a rollover contribution to the IRA. This rollover can be a https://iradictionary.com/directrollover direct rollover or an https://iradictionary.com/definitions/indirectrollover indirect rollover which is subject to https://iradictionary.com/definitions/60dayrolloverrule the 60-day rule. A rollover from your 401(k), any other qualified plan account, https://iradictionary.com/definitions/403bplan 403(b) account or https://iradictionary.com/definitions/457plan 457(b) plan to your IRA is not subject to the once per 12-month (1-year) rule, and it does not affect the once per 12-month rule for rollover contributions between your IRAs.

This question was answered by Denise Appleby , CEO of Appleby Retirement Consulting Inc. http://applebyconsultinginc.com/ Appleby Retirement Consulting Inc provides products and service for retirement accounts, to financial , tax and legal professionals

Please note that there are facts and circumstances that could change the answer to similar questions. Individuals should consult with a advisor regarding the rollover eligibility of assets/amounts.