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Updated over 7 years ago,

User Stats

769
Posts
279
Votes
Shane H.
  • Investor
  • Wichita, KS
279
Votes |
769
Posts

Direct 401k rollover to IRA? - Didnt cash check in 60 days???

Shane H.
  • Investor
  • Wichita, KS
Posted

I have a unique situation (I didnt realize it could be a situation until today) 

(disclaimer for any responders) - I'm asking this question with the understanding anyone that responds is not providing legal advice and they will be held harmless, seek my own professional advice etc)

Sept 30 2016 I had a check issued from my present 401k administrator (the company that administers the plan where I work) and made it payable to a Self Directed IRA account I set up ("John Smith" Company Rollover IRA FBO Shane H)

Time goes by I did not deposit the check into the SDIRA I had set up and just never followed through with the deposit.  I call a month ago as I see the check will expire and had the retirement plan administrator reissue the check (payable the same way)

Someone today just mentioned I had 60 days to deposit the check and complete the transaction -- I found the IRS website where it talks about that - but from my interpretation they are very vague - one part of the site makes it seem the 60 day clock is if you are paid the funds directly ( I was not in the case or at least in my interpretation) -- another part of the site makes it seem any eligible rollover is subject to the 60 day clock.

Did I screw myself by not depositing the check yet?  I think I'd have a valid argument as the plan administrator did not tell me I needed to deposit the check within 60 days - the check was never made payable directly to me (I couldnt cash it if I wanted to) and lastly the funds have sat on paper - I did not do anything with them and the only way I ever touched it was holding the envelope.

I cant find an answer to this online anywhere and everyone I've called says I dont know - I'll be consulting a CPA to see - If I am stuck paying taxes it's not an amount that will kill me but I'll be pissed at myself for not knowing.  Was never aware of a time limit and thought I could always show I never touched the funds it wasn't something to worry about - at least that's what was running through my mind.  Now that I've actually found a good use for them it will be upsetting to have to pay the tax.

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