Transferring Roth IRA Accounts

Thinking about transferring your Roth IRA from one brokerage to another? The easiest way to do this is to make a direct brokerage to brokerage transfer. If you simply withdraw your funds, you have the added burden of having to report the non-taxable distribution on your tax return and then show that you’ve contributed the funds back into a Roth IRA. The reason you will have to do this is because your first Roth IRA custodian didn’t know that you were just transferring the funds, they think you withdrew it. In the next few weeks (end of January), they’ll send you a 1099-R showing that you took a withdrawal when in fact you withdrew just to transfer the funds.

This is similar to the type of situation that happens when you roll over a 401(k) into an IRA. Be sure to do a trustee to trustee transfer so that you don’t run into this problem. If you have any questions, simply ask the brokerage firms on both sides how they handle this sort of thing and they will help you out.






3 responses to “Transferring Roth IRA Accounts”

  1. jane myers

    I contacted my broker at UBS and said that I would like to rollover or transfer my cash balance in my sep/ira account to a CD in a different institution (Bank). I asked if I could write a check directly to the bank from my brokerage account. He said yes. Later, I find out that I can’t. Evidently, as far as the brokerage is concerned, it is a distribution. The brokerage sent me a form 1 month after I did this. I filled it out as a rollover. 1 month after that he called me and said I filled out the form wrong. He sent another one. I filled it out again as a rollover. Finally, after 5 months, he reported it as a distribution. The bank reported it as a rollover. What do I do to avoid paying taxes on the same ira twice? Once with the brokerage that filled out a distribution form for 2009…and the bank that reported it as a rollover in 2008. The transaction took place in 2008. It is still in the bank as a sep/ira, so when I get the funds out of there I will have to pay tax again on the same money.

  2. Trying to figure out if I should do a Sep IRA rollover, so gathering all the information I can before I decide!

  3. Considering Sep IRA accounts, and find a lot of good information here. I especially like the flexibility of the SEP and the high contribution limit.