What can I do with a second maturing IRA?

I have two IRAs maturing in 2017. As I understand the tax court interpretation, only one is permitted to rollover. If that is correct, how do I handle the second IRA?

Personal Finance, IRAs
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December 2016

I think you are confusing the IRA receptacle or account with the investments within the IRA itself. IRAs do not mature, but some types of investments, like bonds or even some "products," do. So, when whatever is inside your IRA matures, the proceeds at maturity should go into the IRA and you can invest however you choose.

Regarding the "rollover" question, you can do a direct custodian to custodian (i.e. Schwab to TD Ameritrade, Fidelity to Schwab, or Merrill Lynch to Schwab) as often as you like per year. So you could consolidate your two IRAs (assuming one isn't a Roth & the other a Traditional) together so you only have one account.

But what you are referring to is a 60 day rollover where you take custody of the monies. You can now only do one 60 day rollover in a calendar year. This is where you call the custodian/brokerage firm and ask them to send you the money directly, then you, in turn, have 60 days to forward the proceeds to your new custodian/brokerage firm or the whole thing is taxable. In the 1st example, because you never took "custody" of the money and it was a direct rollover, no notice or paperwork is ever generated to the IRS. In the 2nd example, the 60 day rollover, the brokerage firm that sent you a check will send a 1099R to the IRS saying you took $____ much money out of your IRA and, therefore, the IRS is put on notice. When you "roll" the money into a new brokerage firm, they send a matching "1099R" contribution to the IRS, and it is a "wash."

But because too many people were doing this numerous times per year, essentially getting 60 day free loans all of the time, the IRS a few years ago decided to limit the 60 day rollover rule/allowance to once/year.

Hope this helps and Happy New Year, Dan Stewart CFA®

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