The 1031 Exchange Institute

Welcome to The 1031 Exchange Institute™. The 1031 Exchange Institute is your complete online resource for 1031 exchange, 1033 exchange, 1034 exchange, 721 exchange, 453 installment sale and 121 exclusion information.  Information will also be provided regarding Self-Directed IRAs, including Traditional IRAs, ROTH IRAs, SEP-IRAs and SIMPLE IRAs. 

The 1031 Exchange Institute is dedicated to educating and informing real estate investors and their advisors on the benefits of 1031 tax-deferred exchanges and other tax deferred and tax exlcusion strategies so they can make better informed investment decisions.

THE SELF-DIRECTED IRA BLOG™

Welcome to The Self-Directed IRA Blog™. The Self-Directed IRA Blog is sponsored by Exeter IRA Services, LLC to help educate and inform real estate investors and their advisors so they can make better informed investment decisions when investing in real estate related assets inside a Self-Directed IRA.  The Self-Directed IRA Blog will cover all things related to Self-Directed Individual Retirement Accounts, including Traditional IRAs, ROTH IRAs, SEP-IRAs and SIMPLE IRAs.  You are welcome to post a comment on any of the articles or ask follow-up questions, but please no solicitations or SPAM posts.

Thursday
Nov152012

Is IRA Rollover O.K. for Distributions by FDIC 

The Federal Deposit Insurance Corporation ("FDIC") recently took over a bank in the state of Pennsylvania.  The FDIC is now issuing distribtuion checks to IRA Holders that had Individual Retirement Accounts at that institution.

Can IRA Holding Rollover Funds?

The issue that comes up is whether the distribution to IRA Holders from the FDIC for the balance of their Individual Retirement Accounts will qualify for Rollover IRA Contribution treatment within the sixty (60) day Rollover IRA Contribution requirement if the IRA Holder had already completed a Rollover within the last twelve (12) month period to or from that same institution. 

IRA Holders are permitted one (1) Rollover IRA Contribution for any one twelve (12) month period.

Specifically, the question is whether IRA Holders that had completed a Rollover IRA Contribution to or from the failed bank during the past twelve (12) month period, is the FDIC check eligible for rollover - or would such Rollover IRA Contribution violate the one-rollover-per-year rule?

IRS Publication 590 Says Yes

The Internal Revenue Service ("IRS") addressed this situation in IRS Publication 590.  Publication 590 states that since the IRA Holder did not request an IRA Distribution from his or her Individual RetirementAccount, the one-rollover-per-year rule does not apply to such IRA Distributions. 

IRA Rollover Contributions Must Be Completed Within 60 Days

Remember, Rollover IRA Contributions are tax free only if the IRA Holder completes the Rollover IRA Contribution within sixty (60) days of the receipt of the IRA Distribution check.  Partial Rollover IRA Contributions perfectly acceptable.