Call Today 412.563.5000
New IRA rollover rules from the IRS

New IRA rollover rules from the IRS

A recent tax court decision changes the ways IRA rollovers will be taxed.

For many years, the IRS has permitted IRAs to be rolled over, without tax consequences, under the following two conditions:

1. The funds are rolled over into a new IRA within 60 days; and

2. Only one tax-free rollover per 12 months per IRA account.

Now, a recent tax court decision has changed the second condition for when IRA rollovers will be taxed. Beginning January 1, 2015, taxpayers will only be able to make one tax-free rollover per year over all of their IRA accounts. So, a taxpayer rolling over 2 different IRA accounts in one 12 month period would be taxed on the second rollover.

This change has profound implications for divorce agreements and decisions. IRA rollovers are a common part of a divorce settlement. This IRS change means that future divorce cases will need to consider either limiting or staggering multiple IRA rollovers, to avoid being taxed.

This change is also a reminder of the importance of hiring legal counsel that understands the tax implications of divorce. Otherwise, the divorcing party may receive a nasty surprise when the tax bill comes due. Speak to your attorney about this change, if you or your spouse have multiple IRAs.


Contact Our Firm Today

Your Desired Outcome Starts with an Initial Consultation.
    • Please enter your name.
    • This isn't a valid phone number.
    • Please enter your email address.
      This isn't a valid email address.
    • Please make a selection.
    • Please enter a message.