Items you will need
- Account number and name for IRA that money is transferring to
- Account statement for IRA that money is transferring from
- Description of securities transferring
- Amount of cash transferring
Transferring funds in an IRA directly from one financial institution to another is a tax-free transaction known as a trustee-to-trustee transfer. There is no distribution to the owner of the IRA. However, a rollover is a distribution of funds from an IRA to the account owner, who may avoid income tax by depositing the funds into another IRA within 60 days. Only one rollover per year is permitted involving the same IRA. This restriction does not exist for a trustee-to-trustee transfer.
Contact the financial institution that receives the transfer.
Confirm with the receiving institution that securities transferring are eligible for holding in an account at that institution. Some mutual funds, for example, are not eligible for accounts at particular financial institutions.
Complete the required transfer form with the receiving institution. This will identify the account receiving the transfer, the institution and account sending the transfer and the securities or amount of cash transferring. Transfer instructions may simply indicate that all securities and cash are transferring.
Provide the institution receiving the transfer with a copy of a recent account statement from the institution sending the transfer.
Tip 1: The institution receiving the transfer will initiate the trustee-to-trustee transfer. The IRA owner is not required to contact the institution sending the transfer.
Tip 2: If any mutual fund is not eligible for the IRA at the receiving financial institution, it must be sold in the account at the sending institution before that money may be transferred. Cash from the sale is transferred instead of the ineligible mutual fund.
- Transfer of money from hands in hands image by Irina smolina from Fotolia.com