Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

IRS: One IRA rollover per year as of 2015

Author: James F. McDonough

Date: August 1, 2014

Key Contacts

Back

The IRS has made a ruling on IRA rollovers in order to close a loophole ruled on earlier this year.

In January, a U.S. Tax Court judge ruled that the actions of tax attorney Alvan Bobrow and his wife were not allowed under the Internal Revenue Code, according to Pacifica Wealth Advisors. In 2008, the couple made a series of withdrawals and transfers among contributory IRAs, rollover IRAs and non-IRA investment accounts, keeping within the 60-day deadline for tax-free IRA rollovers. In effect, Bobrow and his wife were able to use this strategy to use their multiple IRA funds to obtain interest-free loans. Because they were keeping within the 60-day period, the couple assumed at the time that this was permissible by the IRS.

The ruling in the U.S. Tax Court case Bobrow v. Commissioner, T.C. Memo 2014-21 prompted the IRS to tighten IRA rollover rules, limiting taxpayers to one tax-free rollover of any part of a distribution from a single IRA to another IRA within a 365-day period, according to the news source. This rule goes into effect January 1, 2015.

According to the Journal of Accountancy, the IRS has stressed that this rule – which is actually a new interpretation of Sec. 408(d)(3)(A)(i) – will not affect IRA owners’ ability to transfer funds from one IRA trustee to another. Indeed, these transactions are not considered rollovers under Rev. Rul. 78-406, and so are not subject to the one per 365-day period limit.

As Pacifica points out, this decision makes things a little bit more complicated in some situations, such as for taxpayers who own both traditional and Roth IRAs. In any case, there is likely to be more scrutiny of IRA rollovers starting next year.

As professional tax, trust, and estate attorneys, we often write about current matters regarding the IRS at Tax, Trust & Estate News. Check out some of our previous posts:

  • IRS Chief: U.S. Can’t End Corporate Inversions
  • IRS Extends Estate Tax Break
  • IRS Postpones Beginning of Tax Season For the Second Time
  • IRS Budget Constraints May Harm Taxpayers, Advisory Council Warns
  • TIGTA: IRS Ill Prepared For Offshore Tax Evasion Law
  • U.S. Supreme Court Sides With IRS in McCombs Tax Shelter Penalty Case
  • IRS to Focus Attention on Small Business Partnerships

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"
Gross Lease vs. Net Lease: Understanding the Key Differences post image

Gross Lease vs. Net Lease: Understanding the Key Differences

Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]

Author: Robert L. Baker, Jr.

Link to post with title - "Gross Lease vs. Net Lease: Understanding the Key Differences"
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2 post image

What to Do If You Are Impacted by a Retailer Bankruptcy Part 2

Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]

Author: Brian D. Spector

Link to post with title - "What to Do If You Are Impacted by a Retailer Bankruptcy Part 2"
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business post image

The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business

Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]

Author: Dan Brecher

Link to post with title - "The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business"
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1 post image

Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1

The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]

Author: Brian D. Spector

Link to post with title - "Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: