Pub. 11 2021-2022 Issue 3

September • October 2021 25 Denver | Fort Collins | Greeley CP2LAW.COM COAN, PAYTON & PAYNE, LLC PROVIDES A FULL RANGE OF LEGAL SERVICES TO THE BANKING INDUSTRY. R. Clay Bartlett G. Brent Coan Donovan P. Gibbons Amanda T. Huston Michael C. Payne Brett Payton Steven T. Mulligan Julie Trent Matthew L. Chudacoff ONE LAST THING ... Did you know that you can enjoy your association news anytime, anywhere? Scan the QR code or visit: colorado-banker.thenewslinkgroup.org Check it out! The new online article build-outs allow you to: • Stay up to date with the latest association news • Share your favorite articles to social channels • Email articles to friends or colleagues There is still a flipping book for those of you who prefer swiping and a downloadable PDF. A client completed a conversion of her Traditional IRA to her Roth IRA on Feb. 2, 2020. We showed this as a conversion on the 2020 IRS Form 5498, but the client is now stating that this was a prior-year conversion for 2019. She is asking us to correct the Form 5498 to show it as a 2019 conversion. Can this be done? No. IRA owners frequently get the conversion rules confused with the IRA contribution rules. Unlike making IRA contributions, conversions can never be done after December 31 for a prior year, even if they are completed before the IRA owner’s tax filing deadline. You are correct in reporting the conversion contribution on a 2020 Form 5498, IRA Contribution Information, because the conversion took place in 2020. An IRA owner rolled over his 401(k) plan balance to a Traditional IRA in January 2021. In February 2021, he converted his Traditional IRA to a Roth IRA. Now he’s requesting to move his Roth IRA to a different financial organization as a distribution and rollover within 60 days. Is this Carrie Horn, QPA, TGPC, CISP, CHSP permissible or will he violate the one-per-12- month rollover limitation? This is a permissible transaction for the IRA owner. The 12-month limitation on rollovers only applies to rollovers between IRAs (e.g., Traditional IRA to Traditional IRA or Roth IRA to Roth IRA). An IRA owner may roll over only one IRA distribution in a 12-month period, regardless of the number of IRAs he owns. But rollovers from qualified retirement plans, including 401(k) plans, are not included in this rollover restriction. An IRA owner may perform an unlimited number of rollovers between an IRA and a retirement plan, such as a 401(k) plan. Also, there are no restrictions on the number of Roth IRA conversions that an IRA owner may perform in a 12-month period, as long as the multiple conversions do not involve the same assets.