The Internal Revenue Service on Wednesday issued guidance reflecting a change made earlier this year by a tax court ruling that said IRA holders can do only one IRA-to-IRA rollover per year.
Until year-end, the IRS said, the one-per-year limit applies only on an IRA-by-IRA basis (that is, only to rollovers involving the same IRAs).
Beginning next year, the limit will apply by aggregating all of an individual's IRAs, effectively treating them as if they were one IRA for purposes of applying the limit, the IRS said.
Recommended For You
A distribution from an IRA received during 2014 and properly rolled over (normally within 60 days) to another IRA will have no impact on any distributions and rollovers during 2015 involving any other IRAs owned by the same individual.
"This will give IRA owners a fresh start in 2015 when applying the one-per-year rollover limit to multiple IRAs," the IRS said.
The IRS also explained that "although an eligible IRA distribution received on or after Jan. 1, 2015, and properly rolled over to another IRA will still get tax-free treatment, subsequent distributions from any of the individual's IRAs (including traditional and Roth IRAs) received within one year after that distribution will not get tax-free rollover treatment."
The IRS stressed that "a rollover between an individual's Roth IRAs will preclude a separate tax-free rollover within the one-year period between the individual's traditional IRAs, and vice versa."
Excluded from the one-year limit, however, are Roth conversions (rollovers from traditional IRAs to Roth IRAs), rollovers between qualified plans and IRAs, and trustee-to-trustee transfers — direct transfers of assets from one IRA trustee to another.
IRA guru Ed Slott, who runs the irahelp website, suggested advisors need to brush up on the scads of different types of rollovers (there are 31), which each contain their own "set of rules and traps."
If rollover rules "are not followed, taxes and penalties can be triggered," Slott says, so it "really is a minefield, which is why advisors need to be better educated on these issues."
Most advisors, he says, don't get educated "until [a] problem comes up and by then it's often too late to fix it. Most of the rules in this [rollover] area are unforgiving."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
