Final answer:
A transfer of funds from one IRA to another that meets specific requirements is known as a rollover. It allows the funds to continue to grow with tax advantages and must be completed within 60 days to avoid taxation.
Step-by-step explanation:
When a taxpayer transfers money from one Individual Retirement Account (IRA) to another, and all the required conditions are met, this action is referred to as a rollover. During a rollover, the funds are withdrawn from one IRA and deposited into another IRA within a 60-day time frame to avoid taxation. If conducted properly, the transferred funds in the traditional IRA continue to grow tax-deferred, and in the case of a Roth IRA, the growth is tax-free.
The IRA rollover process allows individuals to maintain the tax advantages of their retirement savings when moving their funds between different accounts. It's important to note that there are limits to the number of rollovers you can do in a year and other specific rules that must be followed to ensure that the transfer doesn't become a taxable event.