To transfer an IRA from one institution to another without creating a tax bill, open an account of the same type at the receiving firm and ask that firm to pull the assets directly from your current custodian. This direct trustee-to-trustee transfer keeps the money inside a tax-sheltered account the entire time, carries no limit on how often you can do it, and generally produces no tax form at all.1Internal Revenue Service. Topic No. 451, Individual Retirement Arrangements (IRAs) The alternative, taking a check and redepositing it yourself, works but introduces deadlines and penalties you don’t need.
Choose the Direct Transfer, Not the 60-Day Rollover
Federal law offers two tax-free ways to move IRA money. They are not equivalent.
A direct transfer sends assets straight from your old custodian to the new one. You never take possession. There is no cap on how many you can do in a year, no reporting on your return, and almost no way to create a taxable event by accident. A direct transfer between two IRAs of the same type generally does not generate a Form 1099-R, because the IRS treats it as a non-reportable event unless it involves a Roth conversion or recharacterization.2Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
A 60-day indirect rollover works differently. Your current custodian cuts you a check, and you have 60 calendar days to deposit the full amount into the new IRA. Miss the window and the entire distribution becomes taxable income.3Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts If you’re under 59½, you’ll owe an additional 10% early withdrawal penalty.4Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts You’re also limited to one indirect rollover across all of your IRAs in any 12-month period; a second within that window is treated as a taxable distribution. That limit does not apply to direct trustee-to-trustee transfers.1Internal Revenue Service. Topic No. 451, Individual Retirement Arrangements (IRAs)
One more wrinkle on the indirect route: unlike 401(k) distributions, IRA distributions aren’t subject to mandatory 20% federal withholding. Your custodian withholds 10% by default, and you can opt out. More money reaches you, but more is also at risk if the deadline slips.
Match the Account Types
Tax-free treatment depends on moving like to like. A Traditional IRA transfers to another Traditional IRA. A Roth IRA transfers to another Roth IRA. Moving money from a Traditional into a Roth is a conversion, not a transfer, and the converted amount becomes taxable income for the year.5Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Confirm the account type on both ends before anyone signs anything. Getting it wrong is a common cause of rejections and delays.
SIMPLE IRA: the Two-Year Rule
During the first two years after you begin participating in a SIMPLE IRA plan, you can only transfer those funds to another SIMPLE IRA. Move the money to a Traditional IRA or any other retirement account before that two-year clock runs out and the IRS treats it as a distribution with a 25% penalty tax, rather than the usual 10%.6Internal Revenue Service. SIMPLE IRA Withdrawal and Transfer Rules After two years, a SIMPLE IRA can move to a Traditional IRA through a normal transfer.
Inherited IRAs
If you inherited an IRA from someone other than your spouse, the 60-day rollover is not available. Non-spouse beneficiaries must use a direct trustee-to-trustee transfer. Accept a check for inherited IRA funds and the IRS treats the full amount as taxable income with no way to undo it. The receiving account must also be titled as an inherited IRA, not as your own.
Take Your RMD Before Starting
If you’ve reached the age where required minimum distributions apply, satisfy the current year’s RMD before you initiate the transfer. RMD amounts cannot be rolled over into another tax-deferred account.7Internal Revenue Service. Safe Harbor Explanations – Eligible Rollover Distributions Notice 2026-13 Transfer the full balance without pulling the RMD first and the amount you should have taken is subject to a 25% excise tax, which drops to 10% if corrected within two years.8Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
There’s a practical reason beyond the penalty. A transfer can take several weeks, and once the assets have left your old custodian, that firm no longer has anything to distribute. Take the RMD, let it clear, then start the transfer.
Paperwork to Gather
Pull a recent account statement from your current custodian. The new firm needs the exact legal name of the sending institution, your account number, and the account type.
The core document is a Transfer of Assets form (sometimes called a Transfer Initiation Form), supplied by the new custodian. It authorizes the receiving firm to pull your assets from the old one. You’ll usually attach a copy of your most recent statement for verification. The form asks whether you’re moving the full balance or part of it, and whether you want the move done in-kind or in cash.
Medallion Signature Guarantee
For larger transfers, many institutions require a Medallion Signature Guarantee. A Medallion is not a notary stamp. It’s a certification where the stamping institution takes on financial liability if the signature turns out to be forged. The dollar threshold varies by firm, so ask the new custodian whether you need one before you make a trip.
You’ll generally need to visit a bank or brokerage in person, and most issuers require an existing account relationship. The three issuing programs are STAMP, SEMP, and MSP; most people get theirs at a bank where they already have a checking or savings account.
How the Transfer Runs
Submit your completed paperwork to the new custodian, not the old one. The receiving firm drives the process. For brokerage accounts, it uses the Automated Customer Account Transfer Service (ACATS) to communicate electronically with the delivering firm.9FINRA. Customer Account Transfers FINRA rules require the old firm to complete the transfer within three business days after validating the instruction, though the full process from submission to completion typically runs one to three weeks.10FINRA. 11870 – Customer Account Transfer Contracts
In-Kind or Cash
An in-kind transfer moves your investments as they are: shares of stock and fund positions arrive at the new account without being sold. This avoids forced selling at a bad moment and preserves your cost basis. A cash transfer tells the old custodian to liquidate everything first and send the proceeds. In-kind is the usual choice when the receiving firm supports the same investments.
Assets That Can’t Move In-Kind
Some holdings cannot be transferred through ACATS or accepted by the new custodian. The SEC lists common non-transferable assets:
- Proprietary mutual funds sold exclusively by your old firm that the new firm doesn’t offer.
- Private placement limited partnerships.
- Annuities and bankrupt securities.
When a transfer includes non-transferable assets, the old firm must transfer everything it can and ask what to do with the rest. The usual options are to sell those holdings and send the cash, or leave them at the old firm.11SEC.gov. Transferring Your Brokerage Account – Tips on Avoiding Delays
Transfer-Out Fees
Many custodians charge a fee when assets leave, typically $50 to $100. Some receiving firms will reimburse that fee if you ask, especially for larger balances. Worth raising before you start.
Trailing Dividends
After the main transfer completes, dividends or interest may still land in your old account. FINRA rules require the old firm to forward residual credit balances to your new custodian within 10 business days after they accrue, and the obligation runs for at least six months.10FINRA. 11870 – Customer Account Transfer Contracts Keep your old login active for a few months and watch for stray credits.
Tax Forms After the Move
A direct trustee-to-trustee transfer between two IRAs of the same type generally produces no Form 1099-R and nothing to report on your return.2Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
An indirect 60-day rollover is reported. The old custodian issues a Form 1099-R for the distribution. If the rollover is completed on time, the new custodian issues a Form 5498 confirming receipt. You report the rollover on your return even though no tax is owed when the deadline is met.12Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
If you moved securities in-kind, verify that cost basis information carried over correctly within the first few weeks. Firms don’t always transfer that data cleanly, and a mismatch can distort capital gains calculations years later when you sell.
If You Miss the 60-Day Deadline
A blown deadline is not automatically fatal. Under Revenue Procedure 2016-47, the IRS allows self-certification for a waiver without a private letter ruling.13Internal Revenue Service. Waiver of 60-Day Rollover Requirement – Rev. Proc. 2016-47 Qualifying reasons include:
- An error by the distributing or receiving financial institution.
- A distribution check that was misplaced and never cashed.
- Depositing the funds into an account you mistakenly believed was an eligible retirement plan.
- Serious illness or a death in the family that prevented completing the rollover.
- A postal error or a natural disaster that affected your home.
To self-certify, deposit the funds into an eligible retirement plan as soon as the disqualifying reason no longer applies and send a signed certification letter to the receiving trustee. The IRS can still challenge a self-certification during an audit, but the process gives meaningful protection when the missed deadline wasn’t your fault.