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Indirect / 60-Day Rollover from another IRA

A 60-day rollover is a specific method of moving funds quickly form one IRA account to another.

Typically, a directed IRA Transfer is used.  Account Transfer paperwork instructs the receiving custodian to request from the surrendering custodian a direct transfer of funds.  Reporting is done that clearly indicates this as a non-taxable transfer from one IRA to another.

Unfortunately, that can be a slow process since the paperwork often has to go to both institutions with original signatures and supporting documents.  Trustee-to-trustee transfers can take anywhere from 10 -20 business days or even longer, depending on the responsiveness of the surrendering IRA custodian.

When necessary, the 60-day, or indirect rollover method as described in this memo may be used.

IMPORTANT NOTES:

  • You may only process one 60-day rollover in a 12-month period
  • If you fail to properly complete the rollover within 60 days, the funds will lose their IRA status and be viewed as a taxable distribution.
  • DO NOT, UNDER ANY CIRCUMSTANCES place funds issued as a distribution from an IRA account directly into your LLC/Trust bank account.  The rollover must go through Kingdom Trust Co. or the funds could lose their IRA status.

What is a 60-Day Rollover

A 60-day or indirect rollover is an event where funds are distributed from an IRA account directly to the account holder.  A 60-day rollover is not an option when the source account is a 401(k) or similar employer plan.

The initial movement of funds is a distribution out of the IRA to the account holder and reported by the issuing custodian as such.  This will be considered a taxable event in a tax-deferred account.

IRS rules allow you to re-deposit those funds to an IRA or other qualified retirement plan account within 60 days.  If you do so, the loop is closed on the rollover and the funds are not considered as a distribution.

The receiving custodian will report the receipt of funds.

You will also need to report the distribution and re-deposit on your personal tax return.

Because you are directing the action, you can typically execute such a transfer much more quickly, perhaps in as little as 3-5 business days.

Timing of Rollover Request

You do not need to wait until the new IRA account has been established with Kingdom Trust Co. to initiate the rollover request.

Forms Download

Kingdom Trust Co. Delivery Instructions

Kingdom Trust Co. Deposit Instructions

 

Rollover Request Process

Contact your current IRA custodian and ask for their assistance with a distribution.  They will typically provide you with a Distribution Request form.  Hopefully, they will also be able to assist you with completing the form.  The following categories of questions are normally included on a distribution form:

DISTRIBUTION TYPE: Generally speaking, the type of distribution will be an Early Distribution if you are younger than 59 ½, or a Normal Distribution if you are older.  Sometimes you are provided with an option to indicate this will be a distribution that will be rolled over within 60-days to another IRA.

TAX WITHOLDING:  Elect not to have federal or state taxes withheld

DELIVERY:  Funds will be issued to you, not to the receiving IRA custodian.  If possible, you should have funds sent to a personal bank account by wire transfer, as this will eliminate delays for mailing and check-clearing.

Depositing the Funds to the Kingdom IRA

Once funds have been received, deposited and cleared into your account, you can initiate a deposit into the Kingdom Trust Co. IRA.

This deposit should be done via wire-transfer to eliminate the delays for delivery and check clearing.

Wire routing instructions are provided in the KTC Delivery Instructions form.

Prepare a Deposit Instructions form.  Check the box for 60-Day (Indirect) Rollover in Section 2.

Send the Deposit Instructions form to Kingdom via:

Email to info@kingdomtrust.com

Fax to 270-226-1001

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