Transfer (trustee-to-trustee transfer)

Definition

The (usually) non-reportable movement of assets between retirement plans. Generally, transfers occur between retirement plans of the same type. For instance,

• from a traditional IRA to another traditional IRA ( or SEP IRA) that has the same owner for both.
• from a Roth IRA to another Roth IRA that has the same owner for both.
• from a SIMPLE IRA to another SIMPLE IRA, traditional IRA or SEP IRA that has the same owner for both. If the SIMPLE IRA has not satisfied the two-year requirement, the transaction is reportable

However, transfers can occur between different types of qualified plans, when the assets are being moved between qualified plans sponsored by the same employer.

The IRS uses the term trustee-to-trustee to indicate that the check or other asset is made payable to the receiving financial institution  (or other entity) for some reportable transactions. Examples include :

• Treasury regular 1.408A, as it relates to Roth conversions and recharacterizations , where it is provided  that a direct conversion is a trustee-to-trustee transfe;
• Treasury regular 1.408A, as it relates to a recharacterization , which must be completed as "trustee-to-trustee transfer "
• the qualified charitable donations provisions, which provides that the distribution must be delivered to the eligible charity as a trustee-to-trustee transfer, and
• qualified HSA funding distributions. See the article Reporting Requirements for a Qualified HSA Funding Distributions (QHFD) :

Referring Cite

IRS Instructions for filing 1099-R and 5498  , IRS Publication 590 , Revenue Ruling 78-406

Additional Helpful Information

Non-reportable transfers between can occur for an unlimited number of times during any period. This is unlike rollovers between IRAs , which are limited to one per 12-month period per ‘involved’ IRA

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