IRA Rollovers and Transfers Flashcards
6 cards from real IRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 IRA Rollovers and Transfers flashcards as text
Which of the following assets CAN be rolled over from a 401(k) to a traditional IRA?
Answer: After-tax contributions (non-Roth)
After-tax (non-Roth) contributions from a 401(k) can be rolled over to a traditional IRA or directly to a Roth IRA in a tax-efficient manner.
What is a 'net unrealized appreciation' (NUA) strategy and how does it relate to IRA rollovers?
Answer: A strategy to distribute employer stock from a 401(k) in-kind rather than rolling it to an IRA, taxing appreciation at capital gain rates instead of ordinary income rates
NUA allows the appreciation on employer stock distributed from a 401(k) to be taxed at capital gains rates rather than ordinary income rates, which can be more favorable than rolling to an IRA.
Can a SIMPLE IRA be rolled over to a traditional IRA at any time?
Answer: Only after the two-year participation period has been satisfied
SIMPLE IRA funds cannot be rolled to a traditional IRA or other retirement plan during the first two years of participation; after two years, rollovers are permitted.
If an individual performs a direct rollover from a 401(k) to a traditional IRA, does the IRS consider this as using their one rollover per year?
Answer: No, direct rollovers from employer plans to IRAs are not subject to the once-per-year rule
The once-per-year rollover rule applies only to IRA-to-IRA indirect rollovers; direct rollovers from employer plans are not counted.
What is a reverse rollover in the context of IRAs?
Answer: Rolling IRA funds into an employer-sponsored retirement plan
A reverse rollover moves money from a traditional IRA into an employer plan like a 401(k), which can be useful for applying the Rule of 55 or avoiding RMDs while still working.
Can an inherited IRA received by a non-spouse beneficiary be rolled into the beneficiary's own IRA?
Answer: No, non-spouse beneficiaries cannot roll inherited IRAs into their own IRAs
Non-spouse beneficiaries cannot roll an inherited IRA into their own IRA; they must keep it as an inherited IRA and follow beneficiary distribution rules.