- 8 - If * * * any portion of the balance to the credit of an employee in a qualified trust is paid to him, * * * [and] the employee transfers any portion of the property he receives in such distribution to an eligible retirement plan, [i.e., rollover] * * * then such distribution (to the extent so transferred) shall not be includible in gross income for the taxable year in which paid. Further, section 402(a)(5)(C) provides that such a rollover exclusion shall not apply "to any transfer of a distribution made after the 60th day following the day on which the employee received the property distributed." In other words, if a taxpayer receives a distribution from a retirement plan and fails to make a rollover of such distribution to an "eligible retirement plan" within 60 days of taxpayer's receipt of such distribution, it shall be taxable to him under section 72 in the year of distribution. There is no provision in the law deferring the inclusion of the distribution into gross income until the succeeding year simply because the 60-day rollover period extends into the succeeding year. The term "eligible retirement plan" is defined in section 402(a)(5)(E)(iv) as "(I) an individual retirement account * * *, (II) an individual retirement annuity * * *, (III) a qualified trust, and (IV) an annuity plan described in section 403(a)." (Emphasis added.) A "qualified trust" is defined in section 402(a)(5)(E)(iii) to mean "an employees' trust described in section 401(a) which is exempt from tax under section 501(a)."Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011