A rollover from a Traditional IRA to another IRA must be done within how many days to avoid tax consequences?

• A. 30
• B. 60
• C. 90
• D. 120

Answer: (B)

The key idea is the 60-day rule for indirect IRA rollovers. If you take a distribution from a Traditional IRA and plan to roll it into another IRA, you must complete the rollover within 60 days to avoid having the distribution treated as taxable income. If you miss that window, the amount becomes a taxable distribution for that year, and if you’re under age 59½ you may also owe the 10% early withdrawal penalty unless an exception applies.

Direct transfers, where the custodian moves the funds straight to the new IRA (trustee-to-trustee), don’t involve a distribution to you, so there’s no 60-day deadline and no tax immediate impact. Also note there’s a separate rule limiting indirect rollovers to one per 12-month period across all IRAs, so plan accordingly. In short, completing the rollover within 60 days avoids taxes and penalties.