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About Tax Map

IRS.gov Website
Publication 590-A
taxmap/pubs/p590a-008.htm#en_us_publink1000230559

Can You Move Retirement Plan Assets?(p20)

rule
You can transfer, tax free, assets (money or property) from other retirement programs (including traditional IRAs) to a traditional IRA. You can make the following kinds of transfers. This chapter discusses all three kinds of transfers.
taxmap/pubs/p590a-008.htm#en_us_publink1000230560

Transfers to Roth IRAs.(p20)

rule
Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. For more information about these transfers, see Converting From Any Traditional IRA Into a Roth IRA, later in this chapter, and Can You Move Amounts Into a Roth IRA? in chapter 2.
taxmap/pubs/p590a-008.htm#en_us_publink1000230563
Transfers to Roth IRAs from other retirement plans.(p20)
Under certain conditions, you can move assets from a qualified retirement plan to a Roth IRA. For more information, see Can You Move Amounts Into a Roth IRA? in chapter 2.
taxmap/pubs/p590a-008.htm#en_us_publink1000230565

Trustee-to-Trustee Transfer(p21)

rule
A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, isn’t a rollover. This includes the situation where the current trustee issues a check to the new trustee but gives it to you to deposit. Because there is no distribution to you, the transfer is tax free. Because it isn’t a rollover, it isn’t affected by the 1-year waiting period required between rollovers. This waiting period is discussed later under Rollover From One IRA Into Another.
For information about direct transfers from retirement programs other than traditional IRAs, see Direct rollover option, later.
taxmap/pubs/p590a-008.htm#en_us_publink1000230568

Rollovers(p21)

rule
Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan within 60 days you received the payment or distribution. The contribution to the second retirement plan is called a "rollover contribution."
Note.An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan.
taxmap/pubs/p590a-008.htm#en_us_publink1000230570

Kinds of rollovers to a traditional IRA.(p21)

rule
You can roll over amounts from the following plans into a traditional IRA.Also, see Table 1-4.
taxmap/pubs/p590a-008.htm#en_us_publink1000270086

Table 1-4. Rollover Chart

The following chart indicates the rollovers that are permitted between various types of plans.

Roll To
  Roth IRATraditional
IRA
SIMPLE
IRA
SEP IRAGovernmental 457(b) PlanQualified Plan1
(pre-tax)
403(b) Plan
(pre-tax)
Designated Roth Account (401(k), 403(b), or 457(b))
 Roth IRAYes 2NoNoNoNoNoNoNo
 Traditional IRAYes3Yes 2Yes2, 7, after 2 years Yes 2Yes4YesYesNo
 SIMPLE IRAYes3, after 2 years Yes 2, after 2 years Yes2Yes 2, after 2 years Yes4, after 2 years Yes, after 2 yearsYes, after 2 yearsNo
 SEP IRAYes3Yes 2Yes2, 7, after 2 years Yes 2Yes4YesYesNo
 Governmental 457(b) PlanYes3YesYes7, after 2 years YesYesYesYesYes,3, 5
Roll FromQualified Plan1
(pre-tax)
Yes3YesYes7, after 2 years YesYes4YesYesYes,3, 5
 403(b) Plan
(pre-tax)
Yes3YesYes7, after 2 years YesYes4YesYesYes,3, 5
 Designated Roth Account (401(k), 403(b), or 457(b))YesNoNoNoNoNoNoYes6
1Qualified plans include, for example, profit-sharing, 401(k), money purchase, and defined benefit plans.
2Only one rollover in any 12-month period.
3Must include in income.
4Must have separate accounts.
5Must be an in-plan rollover.
6Any nontaxable amounts distributed must be rolled over by direct trustee-to-trustee transfer.
7Applies to rollover contributions after December 18, 2015. For more information regarding retirement plans and rollovers, visit Tax Information for Retirement Plans.
taxmap/pubs/p590a-008.htm#en_us_publink1000230571

Treatment of rollovers.(p21)

rule
You can’t deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and Reporting rollovers from employer plans.
taxmap/pubs/p590a-008.htm#en_us_publink1000230574
Rollover notice.(p21)
A written explanation of rollover treatment must be given to you by the plan (other than an IRA) making the distribution. See Written explanation to recipients, later, for more details.
taxmap/pubs/p590a-008.htm#en_us_publink1000230575

Kinds of rollovers from a traditional IRA.(p21)

rule
You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. These plans include the Federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Qualified plans may, but aren’t required to, accept such rollovers.
taxmap/pubs/p590a-008.htm#en_us_publink1000230576
Tax treatment of a rollover from a traditional IRA to an eligible retirement plan other than an IRA.(p21)
Ordinarily, when you have basis in your IRAs, any distribution is considered to include both nontaxable and taxable amounts. Without a special rule, the nontaxable portion of such a distribution couldn’t be rolled over. However, a special rule treats a distribution you roll over into an eligible retirement plan as including only otherwise taxable amounts if the amount you either leave in your IRAs or don’t roll over is at least equal to your basis. The effect of this special rule is to make the amount in your traditional IRAs that you can roll over to an eligible retirement plan as large as possible.
taxmap/pubs/p590a-008.htm#en_us_publink1000230577
Eligible retirement plans.(p21)
The following are considered eligible retirement plans.
taxmap/pubs/p590a-008.htm#en_us_publink1000230578

Time Limit for Making a Rollover Contribution(p21)

rule
You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan.
taxmap/pubs/p590a-008.htm#en_us_publink1000248769

Example.(p21)

You received an eligible rollover distribution from your traditional IRA on June 30, 2018, that you intend to roll over to your 403(b) plan. To postpone including the distribution in your income, you must complete the rollover by August 29, 2018, the 60th day following June 30.
The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. For exceptions to the 60-day period, see Ways to get a waiver of the 60-day rollover requirement, later.
taxmap/pubs/p590a-008.htm#en_us_publink10005418
Plan loan offset.(p21)
A plan loan offset is the amount your employer plan account balance is reduced, or offset, to repay a loan from the plan. How long you have to complete the rollover of a plan loan offset depends on what kind of plan loan offset you have. For tax years beginning after December 31, 2017, if you have a qualified plan loan offset, you will have until the due date (including extensions) for your tax return for the tax year in which the offset occurs to complete your rollover. A qualified plan loan offset occurs when a plan loan in good standing is offset because your employer plan terminates, or because you sever from employment. If your plan loan offset occurs for any other reason, then you have 60 days from the date the offset occurs to complete your rollover.
taxmap/pubs/p590a-008.htm#en_us_publink1000230580

Rollovers completed after the 60-day period.(p21)

rule
In the absence of a waiver, amounts not rolled over within the 60-day period don’t qualify for tax-free rollover treatment. You must treat them as a taxable distribution from either your IRA or your employer's plan. These amounts are taxable in the year distributed, even if the 60-day period expires in the next year. You may also have to pay a 10% additional tax on early distributions as discussed under Early Distributions in Pub. 590-B.
Unless there is a waiver or an extension of the 60-day rollover period, any contribution you make to your IRA more than 60 days after the distribution is a regular contribution, not a rollover contribution.
taxmap/pubs/p590a-008.htm#en_us_publink1000230582

Example.(p22)

You received a distribution in late December 2018 from a traditional IRA that you don’t roll over into another traditional IRA within the 60-day limit. You don’t qualify for a waiver. This distribution is taxable in 2018 even though the 60-day limit wasn’t up until 2019.
taxmap/pubs/p590a-008.htm#en_us_publink100051807

Ways to get a waiver of the 60-day rollover requirement.(p22)

rule
There are three ways to obtain a waiver of the 60-day rollover requirement.
taxmap/pubs/p590a-008.htm#en_us_publink100051808

How do you qualify for an automatic waiver?(p22)

rule
You qualify for an automatic waiver if all of the following apply.
If you don’t qualify for an automatic waiver, you can use the self-certification procedure to make a late rollover contribution or you can apply to the IRS for a waiver of the 60- day rollover requirement.
taxmap/pubs/p590a-008.htm#en_us_publink100051809

How do you self-certify that you qualify for a waiver?(p23)

rule
Pursuant to Revenue Procedure 2016-47 in Internal Revenue Bulletin 2016-37, available at IRB 2016-37, you may make a written certification to a plan administrator or an IRA trustee that you missed the 60-day rollover contribution deadline because of one or more of the 11 reasons listed in Revenue Procedure 2016-47. A plan administrator or an IRA trustee may rely on the certification in accepting and reporting receipt of the rollover contribution. You may make the certification by using the model letter in the appendix to the revenue procedure or by using a letter that is substantially similar. There is no IRS fee for self-certification. A copy of the certification should be kept in your files and be available if requested on audit.
taxmap/pubs/p590a-008.htm#en_us_publink100051810

How do you apply for a waiver and what is the fee?(p23)

rule
You can request a ruling according to the procedures outlined in Revenue Procedure 2003-16 and Revenue Procedure 2018-4. The appropriate user fee of $10,000 must accompany every request for a waiver of the 60-day rollover requirement (see the user fee chart in Appendix A of Revenue Procedure 2018-4).
taxmap/pubs/p590a-008.htm#en_us_publink100051811

How does the IRS determine whether to grant a waiver in a private letter ruling?(p23)

rule
In determining whether to issue a favorable letter ruling granting a waiver, the IRS will consider all of the relevant facts and circumstances, including:
Note.The IRS can waive only the 60-day rollover requirement and not the other requirements for a valid rollover contribution. For example, the IRS can’t waive the IRA one-rollover-per-year rule.
For more information on waivers of the 60-day rollover requirement, go to RetirementPlans-FAQs.
taxmap/pubs/p590a-008.htm#en_us_publink1000230586

Amount.(p23)

rule
The rules regarding the amount that can be rolled over within the 60-day time period also apply to the amount that can be deposited due to a waiver. For example, if you received $6,000 from your IRA, the most that you can deposit into an eligible retirement plan due to a waiver is $6,000.
taxmap/pubs/p590a-008.htm#en_us_publink1000230587

Extension of rollover period.(p23)

rule
If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, two special rules extend the rollover period.
taxmap/pubs/p590a-008.htm#en_us_publink1000230588
Frozen deposit.(p23)
This is any deposit that can’t be withdrawn from a financial institution because of either of the following reasons.
taxmap/pubs/p590a-008.htm#en_us_publink1000230589

Rollover From One IRA Into Another(p23)

rule
You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Because this is a rollover, you can’t deduct the amount that you reinvest in an IRA.
Deposit
You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. This is called recharacterizing the contribution. See Recharacterizations in this chapter for more information.
taxmap/pubs/p590a-008.htm#en_us_publink1000230592

Waiting period between rollovers.(p23)

rule
Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you can’t, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. You also can’t make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover.
The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Rules apply to the number of rollovers you can have with your traditional IRAs. See Application of one-rollover-per-year limitation below.
taxmap/pubs/p590a-008.htm#en_us_publink1000230593

Example.(p23)

You have two traditional IRAs, IRA-1 and IRA-2. In 2018, you made a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). You can’t, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA.
For 2018, the rollover from IRA-1 into IRA-3 prevents you from making a tax-free rollover from IRA-2 into any other traditional IRA. This is because in 2018 you are only allowed to make one rollover within a 1-year period. So when you make a rollover from IRA-1 to IRA-3, you can’t make a rollover from IRA-2 to any other traditional IRA.
taxmap/pubs/p590a-008.htm#en_us_publink100074359
Exception.(p24)
An IRA distribution made from a failed financial institution by the Federal Deposit Insurance Corporation as receiver is not treated as a rollover for purposes of the one-rollover-per-year limitation, provided:
  1. Neither the failed financial institution nor the depositor initiated the distribution, and
  2. No financial institution has assumed the IRAs of the failed financial institution.
taxmap/pubs/p590a-008.htm#en_us_publink100024687

Application of one-rollover-per-year limitation.(p24)

rule
You can make only one rollover from an IRA to another (or the same) IRA in any 1-year period regardless of the number of IRAs you own. The limit will apply by aggregating all of an individual's IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. However, trustee-to-trustee transfers between IRAs aren’t limited and rollovers from traditional IRAs to Roth IRAs (conversions) aren’t limited.
taxmap/pubs/p590a-008.htm#en_us_publink100025103

Example.(p24)

John has three traditional IRAs: IRA-1, IRA-2, and IRA-3. John didn’t take any distributions from his IRAs in 2018. On January 1, 2019, John took a distribution from IRA-1 and rolled it over into IRA-2 on the same day. For 2019, John can’t roll over any other 2019 IRA distribution, including a rollover distribution involving IRA-3. This wouldn’t apply to a conversion.
taxmap/pubs/p590a-008.htm#en_us_publink1000230595

The same property must be rolled over.(p24)

rule
If property is distributed to you from an IRA and you complete the rollover by contributing property to an IRA, your rollover is tax free only if the property you contribute is the same property that was distributed to you.
taxmap/pubs/p590a-008.htm#en_us_publink1000230596

Partial rollovers.(p24)

rule
If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). The amount you keep may be subject to the 10% additional tax on early distributions discussed later under What Acts Result in Penalties or Additional Taxes.
taxmap/pubs/p590a-008.htm#en_us_publink1000230598

Required distributions.(p24)

rule
Amounts that must be distributed during a particular year under the required distribution rules (discussed in Pub. 590-B) aren’t eligible for rollover treatment.
taxmap/pubs/p590a-008.htm#en_us_publink1000230599

Inherited IRAs.(p24)

rule
If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own as discussed earlier under What if You Inherit an IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230603

Reporting rollovers from IRAs.(p24)

rule
Report any rollover from one traditional IRA to the same or another traditional IRA on Form 1040, lines 4a and 4b; or Form 1040NR, lines 17a and 17b.
Enter the total amount of the distribution on Form 1040, line 4a; or Form 1040NR, line 17a. If the total amount on Form 1040, line 4a; or Form 1040NR, line 17a, was rolled over, enter zero on Form 1040, line 4b; or Form 1040NR, line 17b. If the total distribution wasn’t rolled over, enter the taxable portion of the part that wasn’t rolled over on Form 1040, line 4b; or Form 1040NR, line 17b. Enter "Rollover" next to line 4b; or line 17b, Form 1040NR. See your tax return instructions.
If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2019, attach a statement explaining what you did.
For information on how to figure the taxable portion, see Are Distributions Taxable? in Pub. 590-B.
taxmap/pubs/p590a-008.htm#en_us_publink1000230605

Rollover From Employer's Plan Into an IRA(p24)

rule
You can roll over into a traditional IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's):
A qualified plan is one that meets the requirements of the Internal Revenue Code.
taxmap/pubs/p590a-008.htm#en_us_publink1000230606

Eligible rollover distribution.(p24)

rule
Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following.
  1. A required minimum distribution (explained later under When Must You Withdraw Assets? (Required Minimum Distributions) in Pub. 590-B).
  2. A hardship distribution.
  3. Any of a series of substantially equal periodic distributions paid at least once a year over:
    1. Your lifetime or life expectancy,
    2. The lifetimes or life expectancies of you and your beneficiary, or
    3. A period of 10 years or more.
  4. Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains.
  5. A loan treated as a distribution because it doesn’t satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. See the discussion earlier of plan loan offsets (including qualified plan loan offsets) under Time Limit for Making a Rollover Contribution.
  6. Dividends on employer securities.
  7. The cost of life insurance coverage.
Your rollover into a traditional IRA may include both amounts that would be taxable and amounts that wouldn’t be taxable if they were distributed to you, but not rolled over. To the extent the distribution is rolled over into a traditional IRA, it isn’t includible in your income.
Deposit
Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. See Form 8606 under Distributions Fully or Partly Taxable in Pub. 590-B.
taxmap/pubs/p590a-008.htm#en_us_publink1000230610

Rollover by nonspouse beneficiary.(p25)

rule
If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you can roll over all or part of an eligible rollover distribution from one of the types of plans listed above into a traditional IRA. You must make the rollover by a direct trustee-to-trustee transfer into an inherited IRA.
You will determine your required minimum distributions in years after you make the rollover based on whether the employee died before his or her required beginning date for taking distributions from the plan. For more information, see Distributions after the employee's death under Tax on Excess Accumulation in Pub. 575.
taxmap/pubs/p590a-008.htm#en_us_publink1000230612

Written explanation to recipients.(p25)

rule
Before making an eligible rollover distribution, the administrator of a qualified retirement plan must provide you with a written explanation. It must tell you about all of the following.
The plan administrator must provide you with this written explanation no earlier than 90 days and no later than 30 days before the distribution is made.
However, you can choose to have a distribution made less than 30 days after the explanation is provided as long as both of the following requirements are met. Contact the plan administrator if you have any questions regarding this information.
taxmap/pubs/p590a-008.htm#en_us_publink1000230613

Withholding requirement.(p25)

rule
Generally, if an eligible rollover distribution is paid directly to you, the payer must withhold 20% of it. This applies even if you plan to roll over the distribution to a traditional IRA. You can avoid withholding by choosing the direct rollover option, discussed later.
taxmap/pubs/p590a-008.htm#en_us_publink1000230615
Exceptions.(p25)
The payer doesn’t have to withhold from an eligible rollover distribution paid to you if either of the following conditions applies.
EIC
The amount withheld is part of the distribution. If you roll over less than the full amount of the distribution, you may have to include in your income the amount you don’t roll over. However, you can make up the amount withheld with funds from other sources.
taxmap/pubs/p590a-008.htm#en_us_publink1000230617
Other withholding rules.(p25)
The 20% withholding requirement doesn’t apply to distributions that aren’t eligible rollover distributions. However, other withholding rules apply to these distributions. The rules that apply depend on whether the distribution is a periodic distribution or a nonperiodic distribution. For either of these types of distributions, you can still choose not to have tax withheld. For more information, see Pub. 575.
taxmap/pubs/p590a-008.htm#en_us_publink1000230618

Direct rollover option.(p25)

rule
Your employer's qualified plan must give you the option to have any part of an eligible rollover distribution paid directly to a traditional IRA. The plan isn’t required to give you this option if your eligible rollover distributions are expected to total less than $200 for the year.
taxmap/pubs/p590a-008.htm#en_us_publink1000230619
Withholding.(p25)
If you choose the direct rollover option, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the traditional IRA.
If any part is paid to you, the payer must withhold 20% of that part's taxable amount.
taxmap/pubs/p590a-008.htm#en_us_publink1000230620

Choosing an option.(p25)

rule
Table 1-5 may help you decide which distribution option to choose. Carefully compare the effects of each option.
taxmap/pubs/p590a-008.htm#en_us_publink1000230621

Table 1-5. Comparison of Payment to You Versus Direct Rollover

Affected itemResult of a payment to youResult of a
direct rollover
WithholdingThe payer must withhold 20% of the taxable part.There is no withholding.
Additional taxIf you are under age 591/2, a 10% additional tax may apply to the taxable part (including an amount equal to the tax withheld) that isn’t rolled over. There is no 10% additional tax. See Early Distributions in Pub. 590-B.
When to report
as income
Any taxable part (including the taxable part of any amount withheld) not rolled over is income to you in the year paid.Any taxable part isn’t income to you until later distributed to you from the IRA.
Deposit
If you decide to roll over any part of a distribution, the direct rollover option will generally be to your advantage. This is because you won’t have 20% withholding or be subject to the 10% additional tax under that option.
 If you have a lump-sum distribution and don’t plan to roll over any part of it, the distribution may be eligible for special tax treatment that could lower your tax for the distribution year. In that case, you may want to see Pub. 575 and Form 4972, Tax on Lump-Sum Distributions, and its instructions to determine whether your distribution qualifies for special tax treatment and, if so, to figure your tax under the special methods.
 You can then compare any advantages from using Form 4972 to figure your tax on the lump-sum distribution with any advantages from rolling over all or part of the distribution. However, if you roll over any part of the lump-sum distribution, you can’t use the Form 4972 special tax treatment for any part of the distribution.
taxmap/pubs/p590a-008.htm#en_us_publink1000230625
Contributions you made to your employer's plan.(p26)
You can roll over a distribution of voluntary deductible employee contributions (DECs) you made to your employer's plan. Prior to January 1, 1987, employees could make and deduct these contributions to certain qualified employers' plans and government plans. These aren’t the same as an employee's elective contributions to a 401(k) plan, which aren’t deductible by the employee.
If you receive a distribution from your employer's qualified plan of any part of the balance of your DECs and the earnings from them, you can roll over any part of the distribution.
taxmap/pubs/p590a-008.htm#en_us_publink1000230626

No waiting period between rollovers.(p26)

rule
The once-a-year limit on IRA-to-IRA rollovers doesn’t apply to eligible rollover distributions from an employer plan. You can roll over more than one distribution from the same employer plan within a year.
taxmap/pubs/p590a-008.htm#en_us_publink1000230627

IRA as a holding account (conduit IRA) for rollovers to other eligible plans.(p26)

rule
If you receive an eligible rollover distribution from your employer's plan, you can roll over part or all of it into one or more conduit IRAs. You can later roll over those assets into a new employer's plan. You can use a traditional IRA as a conduit IRA. You can roll over part or all of the conduit IRA to a qualified plan, even if you make regular contributions to it or add funds from sources other than your employer's plan. However, if you make regular contributions to the conduit IRA or add funds from other sources, the qualified plan into which you move funds won’t be eligible for any optional tax treatment for which it might have otherwise qualified.
taxmap/pubs/p590a-008.htm#en_us_publink1000230628

Property and cash received in a distribution.(p26)

rule
If you receive both property and cash in an eligible rollover distribution, you can roll over part or all of the property, part or all of the cash, or any combination of the two that you choose.
taxmap/pubs/p590a-008.htm#en_us_publink1000230629
The same property (or sales proceeds) must be rolled over.(p26)
If you receive property in an eligible rollover distribution from a qualified retirement plan, you can’t keep the property and contribute cash to a traditional IRA in place of the property. You must either roll over the property or sell it and roll over the proceeds, as explained next.
taxmap/pubs/p590a-008.htm#en_us_publink1000230630

Sale of property received in a distribution from a qualified plan.(p26)

rule
Instead of rolling over a distribution of property other than cash, you can sell all or part of the property and roll over the amount you receive from the sale (the proceeds) into a traditional IRA. You can’t keep the property and substitute your own funds for property you received.
taxmap/pubs/p590a-008.htm#en_us_publink1000230631

Example.(p26)

You receive a total distribution from your employer's plan consisting of $10,000 cash and $15,000 worth of property. You decide to keep the property. You can roll over to a traditional IRA the $10,000 cash received, but you can’t roll over an additional $15,000 representing the value of the property you choose not to sell.
taxmap/pubs/p590a-008.htm#en_us_publink1000230632
Treatment of gain or loss.(p26)
If you sell the distributed property and roll over all the proceeds into a traditional IRA, no gain or loss is recognized. The sale proceeds (including any increase in value) are treated as part of the distribution and aren’t included in your gross income.
taxmap/pubs/p590a-008.htm#en_us_publink1000230633

Example.(p26)

On September 6, Mike received a lump-sum distribution from his employer's retirement plan of $50,000 in cash and $50,000 in stock. The stock wasn’t stock of his employer. On September 24, he sold the stock for $60,000. On October 6, he rolled over $110,000 in cash ($50,000 from the original distribution and $60,000 from the sale of stock). Mike doesn’t include the $10,000 gain from the sale of stock as part of his income because he rolled over the entire amount into a traditional IRA.
Note.Special rules may apply to distributions of employer securities. For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Pub. 575.
taxmap/pubs/p590a-008.htm#en_us_publink1000230635

Partial rollover.(p26)

rule
If you received both cash and property, or just property, but didn’t roll over the entire distribution, see Rollovers in Pub. 575.
taxmap/pubs/p590a-008.htm#en_us_publink1000230636

Life insurance contract.(p27)

rule
You can’t roll over a life insurance contract from a qualified plan into a traditional IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230637

Distributions received by a surviving spouse.(p27)

rule
If you receive an eligible rollover distribution (defined earlier) from your deceased spouse's eligible retirement plan (defined earlier), you can roll over part or all of it into a traditional IRA. You can also roll over all or any part of a distribution of DECs.
taxmap/pubs/p590a-008.htm#en_us_publink1000230639

Distributions under divorce or similar proceedings (alternate payees).(p27)

rule
If you are the spouse or former spouse of an employee and you receive a distribution from a qualified retirement plan as a result of divorce or similar proceedings, you may be able to roll over all or part of it into a traditional IRA. To qualify, the distribution must be:
taxmap/pubs/p590a-008.htm#en_us_publink1000230640
Qualified domestic relations order.(p27)
A domestic relations order is a judgment, decree, or order (including approval of a property settlement agreement) that is issued under the domestic relations law of a state. A "qualified domestic relations order" gives to an alternate payee (a spouse, former spouse, child, or dependent of a participant in a retirement plan) the right to receive all or part of the benefits that would be payable to a participant under the plan. The order requires certain specific information, and it can’t alter the amount or form of the benefits of the plan.
taxmap/pubs/p590a-008.htm#en_us_publink1000230641
Tax treatment if all of an eligible distribution isn’t rolled over.(p27)
Any part of an eligible rollover distribution that you keep is taxable in the year you receive it. If you don’t roll over any of it, special rules for lump-sum distributions may apply. See Lump-Sum Distributions under Taxation of Nonperiodic Payments in Pub. 575. The 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes, doesn’t apply.
taxmap/pubs/p590a-008.htm#en_us_publink1000230643

Keogh plans and rollovers.(p27)

rule
If you are self-employed, you are generally treated as an employee for rollover purposes. Consequently, if you receive an eligible rollover distribution from a Keogh plan (a qualified plan with at least one self-employed participant), you can roll over all or part of the distribution (including a lump-sum distribution) into a traditional IRA. For information on lump-sum distributions, see Lump-Sum Distributions under Taxation of Nonperiodic Payments in Pub. 575.
taxmap/pubs/p590a-008.htm#en_us_publink1000230644
More information.(p27)
For more information about Keogh plans, see chapter 4 of Pub. 560.
taxmap/pubs/p590a-008.htm#en_us_publink1000230645

Distribution from a tax-sheltered annuity.(p27)

rule
If you receive an eligible rollover distribution from a tax-sheltered annuity plan (section 403(b) plan), you can roll it over into a traditional IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230646
Receipt of property other than money.(p27)
If you receive property other than money, you can sell the property and roll over the proceeds as discussed earlier.
taxmap/pubs/p590a-008.htm#en_us_publink1000230647

Rollover from bond purchase plan.(p27)

rule
If you redeem retirement bonds that were distributed to you under a qualified bond purchase plan, you can roll over tax free into a traditional IRA the part of the amount you receive that is more than your basis in the retirement bonds.
taxmap/pubs/p590a-008.htm#en_us_publink1000230648

Reporting rollovers from employer plans.(p27)

rule
Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 4a; or Form 1040NR, line 17a. This amount should be shown in box 1 of Form 1099-R. From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Enter the remaining amount, even if zero, on Form 1040, line 4b; or Form 1040NR, line 17b. Also, enter "Rollover" next to line 4b of Form 1040; or line 17b of Form 1040NR.
taxmap/pubs/p590a-008.htm#en_us_publink100041921

Rollover of Airline Payments(p27)

rule
If you are a qualified airline employee (defined below) and you received any airline payment(s) (defined below), you may be able to exclude from income a portion of any payment(s) received that are rolled over to a traditional IRA. The maximum amount that can be rolled over to a traditional IRA is 90% of the total airline payment(s) received. The rollover to a traditional IRA must be done within 180 days of receipt of the airline payment.
For 2018, report any airline payment(s) you received in income on Form 1040 or Form 1040NR. For example, if you received a Form W-2 with airline payment amounts reported in box 1, the full amount should be included on Form 1040, line 1; or Form 1040NR, line 8. Up to 90% of all airline payment(s) received may be excluded from income if rolled over to a traditional IRA. To exclude these airline payment rollover amounts for 2018, you must include the amount rolled over on Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21, as a negative amount and write "airline payment" on the dotted line next to line 21.
taxmap/pubs/p590a-008.htm#en_us_publink100041922

Example.(p27)

John, a qualified airline employee, received an airline payment in the amount of $1,000 on January 14, 2018. John rolled over $900 (90%) of the airline payment received to a traditional IRA on March 18, 2018 (within 180 days of receipt). John received a Form W-2 for 2018 with $1,000 reported in box 1 (amount of airline payment). The $1,000 airline payment received (Form W-2, box 1) is reported on Form 1040, line 1. The $900 rollover is reported as a negative amount on Schedule 1 (Form 1040), line 21. John must also write "airline payment" on the dotted line next to line 21.
taxmap/pubs/p590a-008.htm#en_us_publink100034048

Amending a return.(p27)

rule
If you are excluding airline payments from gross income for an earlier year, you will need to file Form 1040X, Amended U.S. Individual Income Tax Return, for the tax year(s) in which the airline payments were received and included in your gross income. You generally must file your amended return by the later of 3 years after the date you filed your original return or within 2 years after the date you paid the tax.
For more details on filing Form 1040X to exclude airline payments from gross income, go to IRS.gov/Form1040X.
taxmap/pubs/p590a-008.htm#en_us_publink100034049

Qualified airline employee.(p28)

rule
A current or former employee of a commercial airline carrier who was a participant in a qualified defined benefit plan maintained by the carrier which was terminated became subject to restrictions under section 402(b) of the Pension Protection Act of 2006, or was frozen effective November 1, 2012. These provisions also apply to surviving spouses of qualified airline employees but don’t apply to covered executives or to surviving spouses of covered executives.
taxmap/pubs/p590a-008.htm#en_us_publink100034050

Covered executives.(p28)

rule
A current or former principal executive officer (PEO) or one of the three highest compensated officers (other than the PEO and principal financial officer (PFO). The term "covered executives" generally doesn’t include the PFO.
taxmap/pubs/p590a-008.htm#en_us_publink100034051

Airline payment.(p28)

rule
An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. The payment also must be made both: Any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can roll over to your traditional IRA. Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits.
taxmap/pubs/p590a-008.htm#en_us_publink1000230649

Rollover of Exxon Valdez Settlement Income (p28)

rule
If you are a qualified taxpayer (defined later) and you received qualified settlement income (defined later), you can contribute all or part of the amount received to an eligible retirement plan which includes a traditional IRA. The amount contributed can’t exceed $100,000 (reduced by the amount of qualified settlement income contributed to an eligible retirement plan in prior tax years) or the amount of qualified settlement income received during the tax year. Contributions for the year can be made until the due date for filing your return, not including extensions.
Qualified settlement income that you contribute to a traditional IRA will be treated as having been rolled over in a direct trustee-to-trustee transfer within 60 days of the distribution. The amount contributed isn’t included in your income at the time of the contributions and isn’t considered to be investment in the contract. Also, the 1-year waiting period between rollovers doesn’t apply.
taxmap/pubs/p590a-008.htm#en_us_publink1000230650

Qualified taxpayer.(p28)

rule
You are a qualified taxpayer if you are:
taxmap/pubs/p590a-008.htm#en_us_publink1000230651

Qualified settlement income.(p28)

rule
Qualified settlement income is any interest and punitive damage awards which are: Qualified settlement income can be received as periodic payments or as a lump sum. See Miscellaneous Income in Pub. 525, Taxable and Nontaxable Income, for information on how to report qualified settlement income.
taxmap/pubs/p590a-008.htm#en_us_publink1000230652

Transfers Incident to Divorce(p28)

rule
If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. The transfer is tax free. For information about transfers of interests in employer plans, see Distributions under divorce or similar proceedings (alternate payees) under Rollover From Employer's Plan Into an IRA, earlier.
taxmap/pubs/p590a-008.htm#en_us_publink1000230654

Transfer methods.(p28)

rule
There are two commonly used methods of transferring IRA assets to a spouse or former spouse. The methods are:
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Changing the name on the IRA.(p28)
If all the assets are to be transferred, you can make the transfer by changing the name on the IRA from your name to the name of your spouse or former spouse.
taxmap/pubs/p590a-008.htm#en_us_publink1000230656
Direct transfer.(p28)
Under this method, you direct the trustee of the traditional IRA to transfer the affected assets directly to the trustee of a new or existing traditional IRA set up in the name of your spouse or former spouse.
If your spouse or former spouse is allowed to keep his or her portion of the IRA assets in your existing IRA, you can direct the trustee to transfer the assets you are permitted to keep directly to a new or existing traditional IRA set up in your name. The name on the IRA containing your spouse's or former spouse's portion of the assets would then be changed to show his or her ownership.
EIC
If the transfer results in a change in the basis of the traditional IRA of either spouse, both spouses must file Form 8606 and follow the directions in the instructions for that form.
taxmap/pubs/p590a-008.htm#en_us_publink1000230658

Converting From Any Traditional IRA Into a Roth IRA(p29)

rule
taxmap/pubs/p590a-008.htm#en_us_publink1000230662

Allowable conversions.(p29)

rule
You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. If properly (and timely) rolled over, the 10% additional tax on early distributions won’t apply. However, a part or all of the distribution from your traditional IRA may be included in gross income and subjected to ordinary income tax.
You must roll over into the Roth IRA the same property you received from the traditional IRA. You can roll over part of the withdrawal into a Roth IRA and keep the rest of it. The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions) and may be subject to the 10% additional tax on early distributions. See When Can You Withdraw or Use Assets, later, for more information on distributions from traditional IRAs and Early Distributions in Pub. 590-B for more information on the tax on early distributions.
taxmap/pubs/p590a-008.htm#en_us_publink1000230665
Periodic distributions.(p29)
If you started taking substantially equal periodic payments from a traditional IRA, you can convert the amounts in the traditional IRA to a Roth IRA and then continue the periodic payments. The 10% additional tax on early distributions won’t apply even if the distributions aren’t qualified distributions (as long as they are part of a series of substantially equal periodic payments).
taxmap/pubs/p590a-008.htm#en_us_publink1000230666

Required distributions.(p29)

rule
You can’t convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 701/2) under the required distribution rules (discussed in Pub. 590-B).
taxmap/pubs/p590a-008.htm#en_us_publink1000230667

Income.(p29)

rule
You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you hadn’t converted them into a Roth IRA. These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA.
You don’t include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed under Are Distributions Taxable in Pub. 590-B.
EIC
If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. See Pub. 505, Tax Withholding and Estimated Tax.
taxmap/pubs/p590a-008.htm#en_us_publink1000230671

Recharacterizations(p29)

rule
You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. This is called recharacterizing the contribution.
To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. If the transfer is made by the due date (including extensions) for your tax return for the tax year for which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. If you recharacterize your contribution, you must do all three of the following.
taxmap/pubs/p590a-008.htm#norecharacterizationsofconversionsm-550dcfb7

No recharacterizations of conversions made in 2018 or later.(p29)

rule
A conversion of a traditional IRA to a Roth IRA, and a rollover from any other eligible retirement plan to a Roth IRA, made in tax years beginning after December 31, 2017, cannot be recharacterized as having been made to a traditional IRA. If you made a conversion in the 2017 tax year, you have until the due date (with extensions) for filing the return for that tax year to recharacterize it.
taxmap/pubs/p590a-008.htm#en_us_publink1000230672

No deduction allowed.(p29)

rule
You can’t deduct the contribution to the first IRA. Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. The contribution won’t be treated as having been made to the second IRA to the extent any deduction was allowed for the contribution to the first IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230673

Conversion by rollover from traditional to Roth IRA.(p29)

rule
You receive a distribution from a traditional IRA in 1 tax year. You then roll it over into a Roth IRA within 60 days of the distribution from the traditional IRA but in the next year. For recharacterization purposes, you would treat this transaction as a contribution to the Roth IRA in the year of the distribution from the traditional IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230674

Effect of previous tax-free transfers.(p29)

rule
If an amount has been moved from one IRA to another in a tax-free transfer, such as a rollover, you generally can’t recharacterize the amount that was transferred. However, see Traditional IRA mistakenly moved to SIMPLE IRA below.
taxmap/pubs/p590a-008.htm#en_us_publink1000230677
Traditional IRA mistakenly moved to SIMPLE IRA.(p29)
If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230678

Recharacterizing excess contributions.(p30)

rule
You can recharacterize only actual contributions. If you are applying excess contributions for prior years as current contributions, you can recharacterize them only if the recharacterization would still be timely with respect to the tax year for which the applied contributions were actually made.
taxmap/pubs/p590a-008.htm#en_us_publink1000230679

Example.(p30)

You contributed more than you were entitled to in 2018. You can’t recharacterize the excess contributions you made in 2018 after April 15, 2019, because contributions after that date are no longer timely for 2018.
taxmap/pubs/p590a-008.htm#en_us_publink1000230680

Recharacterizing employer contributions.(p30)

rule
You can’t recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. SEPs are discussed in chapter 2 of Pub. 560. SIMPLE plans are discussed in chapter 3 of Pub. 560.
taxmap/pubs/p590a-008.htm#en_us_publink1000230682

Recharacterization not counted as rollover.(p30)

rule
The recharacterization of a contribution is not treated as a rollover for purposes of the 1-year waiting period described earlier in this chapter under Rollover From One IRA Into Another. This is true even if the contribution would have been treated as a rollover contribution by the second IRA if it had been made directly to the second IRA rather than as a result of a recharacterization of a contribution to the first IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230686

How Do You Recharacterize a Contribution?(p30)

rule
To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. You must make the notifications by the date of the transfer. Only one notification is required if both IRAs are maintained by the same trustee. The notification(s) must include all of the following information.
In most cases, the net income you must transfer is determined by your IRA trustee or custodian. If you need to determine the applicable net income on IRA contributions made after 2018 that are recharacterized, use Worksheet 1-3. See Regulations section 1.408A-5 for more information.
taxmap/pubs/p590a-008.htm#en_us_publink1000230687
PencilWorksheet 1-3. Determining the Amount of Net Income Due to an IRA Contribution and Total Amount to be Recharacterized
1.Enter the amount of your IRA contribution for 2019 to be recharacterized1.
2.Enter the fair market value of the IRA immediately prior to the recharacterization (include any distributions, transfers, or recharacterization made while the contribution was in the account) 2.
3. Enter the fair market value of the IRA immediately prior to the time the contribution being recharacterized was made, including the amount of such contribution and any other contributions, transfers, or recharacterizations made while the contribution was in the account 3.
4.Subtract line 3 from line 24.
5.Divide line 4 by line 3. Enter the result as a decimal (rounded to at least three places)5.
6. Multiply line 1 by line 5. This is the net income attributable to the contribution to be recharacterized6.
7. Add lines 1 and 6. This is the amount of the IRA contribution plus the net income attributable to it to be recharacterized7.
taxmap/pubs/p590a-008.htm#en_us_publink1000230692

Timing.(p30)

rule
The election to recharacterize and the transfer must both take place on or before the due date (including extensions) for filing your tax return for the tax year for which the contribution was made to the first IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230693
Extension.(p30)
Ordinarily, you must choose to recharacterize a contribution by the due date of the return or the due date plus extensions. However, if you miss this deadline, you can still recharacterize a contribution if:
Appropriate corrective action consists of: Once this is done, you must amend your return to show the recharacterization. You have until the regular due date for amending a return to do this. Report the recharacterization on the amended return and write "Filed pursuant to section 301.9100-2" on the return. File the amended return at the same address you filed the original return.
taxmap/pubs/p590a-008.htm#en_us_publink1000230694
Decedent.(p31)
The election to recharacterize can be made on behalf of a deceased IRA owner by the executor, administrator, or other person responsible for filing the decedent's final income tax return.
taxmap/pubs/p590a-008.htm#en_us_publink1000230695

Election can’t be changed.(p31)

rule
After the transfer has taken place, you can’t change your election to recharacterize.
taxmap/pubs/p590a-008.htm#en_us_publink1000230696

Same trustee.(p31)

rule
Recharacterizations made with the same trustee can be made by redesignating the first IRA as the second IRA, rather than transferring the account balance.
taxmap/pubs/p590a-008.htm#en_us_publink1000230697

Reporting a Recharacterization(p31)

rule
If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. You must treat the contribution as having been made to the second IRA.
taxmap/pubs/p590a-008.htm#en_us_publink1000230700

More than one IRA.(p31)

rule
If you have more than one IRA, figure the amount to be recharacterized only on the account from which you withdraw the contribution.