Rollover Determination

L1: Rollover DeterminationMy employer allowed me to transfer my lump sum pension payout into my 401K this year. I was sent the check, but it was made out to the 401K trustee with “FBO [For the Benefit Of] my name”. Also the 20% withholding wasn’t required.

My questions are:

(1) Is this transfer considered a rollover?

(2) If it were to be considered a rollover, does the 1 year waiting period apply in this case [as I never actually had the money in my possession]?

If the answer above were that the 1-year waiting period doesn’t apply, then I would like to rollover my 401K this year to a brand new IRA and take advantage of the old method of calculating the annual distribution.

This brings up the question regarding the account balance date. I have read one has to use the 12-31-xx date of the previous year, but my new IRA wouldn’t show as money in it as 12-31-01.

(3) If I set up my new IRA in November, can I use the balance as of 11-30-02 as my account balance date?2002-10-09 10:28, By: jeff, IP: [127.0.0.1]

L2: Rollover DeterminationMy employer allowed me to transfer my lump sum pension payout into my 401K this year. I was sent the check, but it was made out to the 401K trustee with “FBO [For the Benefit Of] my name”. Also the 20% withholding wasn”t required. My questions are: (1) Is this transfer considered a rollover?

No, it is considered a trustee-to-trustee transfer as evidenced by the payee’s name. Your physical receipt of the check is incidental as you would be unable to cash it.

(2) If it were to be considered a rollover, does the 1 year waiting period apply in this case [as I never actually had the money in my possession]? If the answer above were that the 1-year waiting period doesn”t apply, then I would like to rollover my 401K this year to a brand new IRA and take advantage of the old method of calculating the annual distribution.

No problem.

This brings up the question regarding the account balance date. I have read one has to use the 12-31-xx date of the previous year, but my new IRA wouldn”t show as money in it as 12-31-01.

Not true. You can actually use any date as an account valuation date however, it is usually convienent to use a month-end becuase you will then have a brokerage statement to back up the valuation.

(3) If I set up my new IRA in November, can I use the balance as of 11-30-02 as my account balance date?

Yes.

TheBadger
wjstecker@wispertel.net
2002-10-09 16:38, By: TheBadger, IP: [127.0.0.1]