2015 IRA One-Rollover Rule

The one rollover per 12-month period rule that applies to all IRAs in aggregate is discussed in the following court case, announcements and Pub 590.

• Bobrow V Commissioner 

• Pub 590

• Announcement 2014-15

• Announcement 2014-32

IRA 12-Month Rule At a Glance

• One rollover allowed per spouse, per 12-month period

• The 12-month rule does not apply to Roth conversions

When does the 60 day clock start?

• Day one is day after the IRA distribution.

• Rollover is required by the end day 60.

COMPLIANCE NOTE 1: Direct-rollovers and trustee-to-trustee transfers are not affected by the 12-nonth rule.

COMPLIANCE NOTE 2: Qualified plans such as Solo 401k Plans and Defined Benefit Plans are not subject to the one rollover per 12-month period rule.

Partnership stock trading open self-directed solo 401k

BACKGROUND & QUESTIONS:

 My wife and I opened a partnership for stock trading. We would like to open a solo 401k. A few requirements and questions:
1. We want to have the solo 401k in interactive brokers. What type of accounts do we need to open in interactive brokers and what is the procedure to have the account under 401k?
2. We have IRAs in interactive brokers and would like to roll over those IRAs to this solo 401k. How easy can it be done and how long would it take to roll over those IRAs?

Let us know the procedure so we will start doing this and hopefully finish it in these couple of days.


ANSWERS: In order to open a solo 401k self employment is required. The partnership may not qualify as it is not considered earned income but rather passive income.

Please see following page for more on this:

http://www.irs.gov/publications/p560/ch04.html#en_US_2013_publink10008950

Self-employed individual.   You can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment in the trade or business for which the plan was set up. Your net earnings must be from your personal services, not from your investments. If you have a net loss from self-employment, you cannot make contributions for yourself for the year, even if you can contribute for common-law employees based on their compensation.

Please see following blog about opening a solo 401k brokerage account at Interactive Brokers.

The IRA transfers can take anywhere form 3 to 10 business days, depending on how busy Interactive brokers is.

http://www.mysolo401k.net/solo-401k-brokerage-account-interactive-brokers/

 

ADDITIONAL INFORMATION

1. Fidelity Checkbook Solo 401k
2. Solo 401k Annual Deadlines
3. Solo 401k Do's and Don'ts