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taxmap/pubs/p970-039.htm#TXMP271c0b1d Rollovers and Other Transfers

Rollover and Other Transfers

Assets can be rolled over or transferred from one QTP to another. In addition, the designated beneficiary can be changed without transferring accounts.

taxmap/pubs/p970-039.htm#TXMP7df5e117 Rollovers

Rollover

Any amount distributed from a QTP is not taxable if it is rolled over to another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary's family (including the beneficiary's spouse). An amount is rolled over if it is paid to another QTP within 60 days after the date of the distribution.

taxmap/pubs/p970-039.htm#TXMP2d8bd338 Members of the beneficiary's family.

For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary.

1. Child or descendant of a child.
2. Brother, sister, stepbrother, or stepsister.
3. Father or mother or ancestor of either.
4. Stepfather or stepmother.
5. Son or daughter of a brother or sister.
6. Brother or sister of father or mother.
7. Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
8. The spouse of any individual listed above.
9. First cousin.

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Example.

When Aaron graduated from college last year he had $5,000 left in his QTP. He wanted to give this money to his younger brother, who was in junior high school. In order to avoid paying tax on the distribution of the amount remaining in his account, Aaron contributed the same amount to his brother's QTP within 60 days of the distribution.

If the rollover is to another QTP for the same beneficiary, only one rollover is allowed within 12 months of a previous transfer to any QTP for that designated beneficiary.

taxmap/pubs/p970-039.htm#TXMP0c7bf7f5 Changing the Designated Beneficiary

Designated Beneficiary, Change

There are no income tax consequences if the designated beneficiary of an account is changed to a member of the beneficiary's family (defined above).

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Example.

Assume the same situation as in the last example. Instead of closing his QTP and paying the distribution into his brother's QTP, Aaron could have instructed the trustee of his account to simply change the name of the beneficiary on his account to that of his brother.

Previous Page:  Publication 970 - Tax Benefits for Education - Are Distributions Taxable Next Page:  Publication 970 - Tax Benefits for Education - Education Exception to Additional Tax on Early IRA Distributions Use     to find additional instances of index items.