A Private Letter Ruling (PLR) from 2010 presents an interesting outcome from an indirect rollover – a rollover that was not done in a trustee-to-trustee transfer.
This particular PLR, 201005057, deals with a situation where the taxpayer received a check from her former employer plan, however the check was made out to her new employer, for her benefit.
When the taxpayer failed to deliver the check to the new plan within 60 days, the rollover became questionable – since indirect (non-trustee-to-trustee transfers) are generally limited to be completed within 60 days. (She did deposit it, just a little later than 60 days.)
When the taxpayer received a 1099R from the former employer plan, it was coded with distribution code “G”, which indicates a direct rollover. Therefore the intent for a direct rollover was clear.
The IRS ruled in
Keep reading this article on Financial Ducks In A Row.