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ROLLOVER

With an IRA rollover, the individual may take possession of the funds for a maximum of 60 calendar days prior to depositing the funds into another qualified account. An investor may only rollover their IRA once every 12 months. The investor has 60 days from the date of the distribution to deposit 100 percent of the funds into another qualified account or they must pay ordinary income taxes on the distribution and a 10 percent penalty tax if the investor is under 59 1/2.

TRANSFER

An investor may transfer their IRA directly from one custodian to another by simply signing an account transfer form. The investor never takes possession of the assets in the account and the investor may directly transfer their IRA as often as they like.

DEATH OF AN IRA OWNER

Should the owner of an IRA die, the account will become the property of the beneficiary named on the account by the owner. If the beneficiary is the spouse of the owner, special rules apply. The spouse may elect to roll over the IRA into his or her own IRA or retirement plan, such as a 401k. If this is elected, there will be no tax presently due on the money. However, the spouse is still subject to the required minimum distribution rule at age 70 1/2. The surviving spouse may also elect to cash in the IRA. The distributions will be subject to income tax but will not be subject to the 10 percent penalty tax. If the beneficiary is not the spouse, the money may not be rolled in to another IRA or retirement account. If the account owner died prior to age 70 1/2, when the required distributions need to be made, the money must all be distributed prior to the end of the fifth year, or the money may be distributed in equal installments based upon the beneficiary's life expectancy. If the account owner has died after the start of the required minimum distributions, the payment schedule of distributions will now be based on the life expectancy of the beneficiary.

 
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