Tax News Highlights

Existing IRA Rollover Guidance in Effect Until Dec. 31, 2014

Nov. 13, 2014

On Nov. 10, the IRS released additional guidance for taxpayers affected by the U.S. Tax Court’s recent decision in Alvan L. Bobrow and Elisa S. Bobrow v. Commissioner of Internal Revenue (Bobrow ), which modifies the treatment of individual retirement account (IRA) rollovers. Prior to the Bobrow decision, the IRS permitted individuals with multiple IRAs to do one rollover per year from each IRA. The court rejected this position, holding that a taxpayer is entitled to only one IRA rollover per year even if the taxpayer has multiple IRAs.

The IRS initially responded to the Bobrow case in Announcement 2014-15, indicating its intent to revise existing guidance and issue regulations following the Bobrow decision. The announcement clarifies that the IRS will not apply the new rule prior to Jan. 1, 2015.

In Announcement 2014-32, which will be published in the Nov. 24 Internal Revenue Bulletin, the IRS further clarifies that any rollover distribution initiated prior to Jan. 1, 2015, will not count toward the new one-rollover-per-year limit in 2015 even if the rollover period extends to 2015.

  

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Marv Hills
574.236.7605
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Marvin Hills - 150
Marvin D. Hills
Partner, Private Client Services Leader