IRS withdraws proposed IRA regs that conflict with Bobrow decision

The IRS has announced that it is withdrawing Proposed Reg. Sec. 1.408-4(b)(4)(ii) to reflect the Tax Court’s holding in Bobrow v. Commissioner.

Code Sec. 408(d)(3)(B) provides that an individual is permitted to make only one rollover from an IRA in any one-year period. In Bobrow, the Tax Court held that this limit applies on an aggregate basis, meaning that an individual could not make an IRA-to-IRA rollover if he or she had made such a rollover involving any of the individual’s IRAs in the preceding one-year period. The IRS previously announced that it intends to follow the Tax Court’s holding and provided transition relief to IRA owners (see IRS Announcement 2014-15). Consistent with that announcement, the IRS said that it will not apply the Bobrow interpretation of Code Sec. 408(d)(3)(B) to any rollover that involves a distribution occurring before January 1, 2015.

Source: 79 FR 40031.

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