Customer AccountsQuestion 84 of 110
A customer receives a distribution check from a former employer's 401(k) plan and wants to move the money to an IRA. Which statement is correct?
a.The customer has 12 months to complete the rollover
b.The customer generally has 60 days to deposit the funds into the IRA, and a direct trustee-to-trustee transfer avoids withholding and the deadline
c.The customer may complete an indirect rollover as many times as desired in a 12-month period
d.Rollovers from employer plans to IRAs are not permitted
Explanation
An indirect rollover must be completed within 60 days or the distribution becomes taxable, and plan distributions paid to the participant are generally subject to mandatory federal withholding. A direct transfer between custodians sidesteps both problems and has no frequency limit. IRA-to-IRA indirect rollovers are limited to one in any 12-month period.
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