Direct Transfer

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DEFINITION of 'Direct Transfer'

A transfer of assets from one type of tax-deferred retirement plan or account to another. Direct transfers are not considered to be distributions and are therefore not taxable as income or subject to any penalties for early distribution. This type of transfer is now usually done electronically, without a check being cut from one custodian to another.

BREAKING DOWN 'Direct Transfer'

Direct transfers can be effected by the account or plan owner by filling out the requisite paperwork. Most transfers take several days to complete, although this process is now generally faster in the electronic and computer age than in the past. Direct rollovers from qualified plans are a form of direct transfer.

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RELATED FAQS
  1. If an employee covered by a SIMPLE leaves his employer within the two-year period ...

    During the first two years after the SIMPLE IRA is established, assets held in the SIMPLE must not be transferred or rolled ... Read Full Answer >>
  2. Can I roll over my IRA assets to a sheltered Canadian plan?

    It does not appear that this is an option for you. The current version of the U.S. Code and the U.S./Canada Treaty do not ... Read Full Answer >>
  3. I am in the second year of taking SEPP distributions from my IRA. Can I transfer ...

    The most recent guidance issued by the IRS and the Treasury Department is Revenue Ruling 2002-62. There is some disagreement ... Read Full Answer >>
  4. I am the beneficiary of an IRA and a Keogh. Can I combine them into one plan?

    It depends. If you are a "spouse beneficiary" for both the Keogh and the IRA, then you may transfer or roll over the inherited ... Read Full Answer >>
  5. Are spousal Social Security benefits taxable?

    Your spousal Social Security benefits may be taxable, depending on your total household income for the year. About one-third ... Read Full Answer >>
  6. Are spousal Social Security benefits retroactive?

    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... Read Full Answer >>

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