Definition of "Tax-free rollover"

Andres Morejon real estate agent

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Andres Morejonelite badge icon

RLAH Real Estate

  1. transfer of money from or an employer-sponsored pension or other qualified plan into an INDIVIDUAL RETIREMENT ACCOUNT (IRA) with out paying tax on the distribution.
  2. transfer of money from one individual retirement account to another without paying tax.
In both cases, the law allows the account holder 60 days to place the money in a new IRA account. Transfer from one account to another can be accomplished either by withholding the money from one account and depositing it in another within 60 days, or by instructing one institution to transfer it to a second. As long as the new deposit is made within 60 days, there is no current tax liability.

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