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Taxmap/pubs/p970-040.htm#TXMP7df1df3f 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/p970-040.htm#TXMP3a553ae8 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/p970-040.htm#TXMP739d27e6 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. Son or daughter or descendant of son or daughter.
2. Stepson or stepdaughter.
3. Brother, sister, stepbrother, or stepsister.
4. Father or mother or ancestor of either.
5. Stepfather or stepmother.
6. Son or daughter of a brother or sister.
7. Brother or sister of father or mother.
8. Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
9. The spouse of any individual listed above.
10. First cousin.

Taxmap/pubs/p970-040.htm#TXMP69b3a8a2
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.

Only one rollover per QTP is allowed during the 12-month period ending on the date of the payment or distribution.

Taxmap/pubs/p970-040.htm#TXMP566f9865 Changing the Designated Beneficiary

Designated Beneficiary, Change

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

Taxmap/pubs/p970-040.htm#TXMP1ff4e518
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 - Early Distributions From IRAs Use     to find additional instances of index items.