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One-Year Rule Applies to Future Rollovers

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in Small Business Tax

Q.  In a recent issue, you said that someone could have multiple IRA rollovers at the same time. I thought you could only do this once a year. Are you right?

A.  Yes. The reader’s question involved multiple rollovers from qualified plans and IRAs to a single traditional IRA. The one-year rule prohibits you from subsequently making a rollover to another IRA within the same year. For example, if you roll over funds from IRA No. 1 to new IRA No. 2, you cannot—within one year of the distribution—make another rollover from IRA No. 2 into another traditional IRA.

Tip: If you have a third IRA, you can still roll over funds from this IRA No. 3 to another traditional IRA without regard to the one-year rule.

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