Outgoing IRA rollovers and transfers

ARTICLE TAKEAWAYS

  • Differences between a rollover and a transfer of assets
  • One IRA-to-IRA rollover per owner is allowed per consecutive-12-month period
  • Steps to take to move funds out of your Capital Bank and Trust Company (CB&T) IRA

Rollover and transfer of assets comparison

A rollover and a transfer of assets are both ways to move money from one retirement account to another. The types of accounts involved, and whether you take possession of the assets, determine the type of move and tax reporting. 

This table compares the differences between the types of moves.

Type of move

Process

Internal Revenue Service (IRS) tax reporting

Direct rollover*

The assets are distributed from a retirement plan, and the rollover distribution is paid directly to another IRA or retirement plan.

Rollovers are generally tax reportable but are not taxable. Form 1099-R is mailed by the sending firm the following year, and Form 5498 is mailed by the receiving firm after the tax-filing deadline.

Consult a tax advisor for more information.

Indirect rollover*

Assets are distributed and paid directly to you, as the account owner. 

For the money to be treated as a rollover, you must reinvest all or part of the distribution into the receiving IRA or retirement account within 60 days of receipt. 

Rollovers are generally tax reportable but are not taxable. Form 1099-R is mailed by the sending firm the following year, and Form 5498 is mailed by the receiving firm after the tax-filing deadline.

Consult a tax advisor for more information.

Transfer of assets

Assets are distributed from one IRA and sent directly to another IRA.

None


* Only one IRA-to-IRA rollover per owner is allowed per consecutive-12-month period (beginning on the date the distribution is received), regardless of the number of IRAs owned. The one-rollover-per-12-month-period limit does not apply to rollovers from traditional IRAs to Roth IRAs (conversions) or to rollovers from IRAs to employer-sponsored retirement plans.

Type of move from your CB&T IRA

This table identifies the type of move(s) allowed, based on the receiving account type.

For assets moved out of a traditional IRA:

If the receiving account is a:

The type of move is a:

401(k), 403(b) or 457(b)

Rollover (indirect or direct)1,2

Roth IRA

Conversion3

Traditional IRA, SIMPLE IRA or SEP IRA/SARSEP

Transfer of assets, rollover (direct or indirect)

1 These plans are not required to accept IRA rollovers. Check with the receiving plan to confirm that the IRA rollover will be accepted.

2 Only pre-tax contributions in the IRA can roll over into a qualified plan. After-tax contributions must remain in the IRA.

3 Talk to your financial professional or tax advisor for additional details on IRA conversions.

For assets moved out of a Roth IRA:

If the receiving account is a:

The type of move is a:

Roth IRA

Transfer of assets or rollover (direct or indirect)

How to move assets from your CB&T IRA

Related content

IRA Rollover/Transfer Request (PDF)
Signature guarantees
Traditional and Roth IRA tax FAQ
Closing your account

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