Question

In order to avoid being considered a distribution and therefore taxes accordingly, a rollover from a qualified plan to another qualified plan or to an IRA must be accomplished within:

a. 30 days.
b. 60 days.
c. 90 days.
d. 6 months.

Answer 1

A rollover from a qualified plan to another qualified plan or an IRA must be completed within 60 days to avoid being considered a distribution and taxed accordingly.

Step-by-step explanation:

In order to avoid being considered a distribution and therefore taxes accordingly, a rollover from a qualified plan to another qualified plan or to an IRA must be accomplished within 60 days.

When an individual rolls over funds from a qualified plan (such as a 401(k)) to another qualified plan or an Individual Retirement Account (IRA), they are essentially transferring the funds from one retirement account to another without triggering any immediate tax consequences. However, this transfer must be completed within 60 days to be considered a valid rollover and avoid being classified as a distribution.