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The shifting of funds from one IRA trustee/custodian directly to another trustee/custodian is called a transfer. It is not considered a rollover because nothing was paid over to you. You can have as many transfers as you like each year; transfers are tax-free, and there are no waiting periods between transfers. They don't have to be reported on your tax return.
A rollover, in contrast, is a tax-free distribution to you of assets from one IRA or retirement plan that you then contribute to a different IRA or retirement plan. Under certain circumstances, you may either roll over assets withdrawn from one IRA into another, or roll over a distribution from a qualified retirement plan into an IRA. Distributions of pre-tax assets from certain qualified plans that were rolled into an IRA can generally be rolled backed to that qualified plan.
To avoid tax, a distribution paid to you (including the 20% withheld) must be rolled over within 60 days of receipt of the distribution. Any portion not timely rolled over, including the 20% withheld will be subject to income taxes. Rollovers, whether taxable or not, must be reported on your tax return, as follows: Enter the total amount of the distribution on Line 15a of Form 1040 or Line 11a of Form 1040A; then enter the taxable amount, if any (for example, any amount that was not rolled over) on Line 15b or Line 11b. If you are rolling over a distribution from an employer's plan to an IRA, the distribution and the taxable portion (if any) are reported on Lines 16a and 16b of Form 1040, or Line 12a and 12b of Form 1040A.
A rollover from one IRA to another IRA enables you to change your investment strategy and may enhance your rate of return. It can also be used to obtain a short "bridge loan" from yourself, since you'll have the use of the funds for any purpose you want, for up to 60 days. This type of rollover may be made only once a year, but the once-a-year rule applies separately to each IRA you own. If property other than cash is received, that same property must be rolled over. Except for an IRA received by a surviving spouse, an inherited IRA cannot be rolled over into, or receive a rollover from, another IRA.
Distributions from an eligible retirement plan of a deceased participant/owner can be rolled over by a nonspouse beneficiary. If a direct trustee-to-trustee transfer is made to an IRA that has been established to receive the distribution on behalf of a beneficiary who is not the participant/owner's surviving spouse, the following treatment applies: