Question

Telly, age 38, has a $125,800 IRA with Blue Mutual Fund. He has read good things about the management of Green Mutual Fund, so he opens a Green Fund IRA. Telly asked for a distribution rollover and received his balance from the Blue Fund on May 1, 2019. Telly opted to have no withholding on the distribution. a. What amount will Telly receive from the Blue Fund IRA

Answer 1

Answer: $125,800

Explanation:

Telly would receive the full amount from the Blue Mutual Fund because he is transferring from one IRA to another.

Taxpayers are allowed to transfer or perform a distribution rollover once a year and this is what he is taking advantage of. No amount will be withheld as well should this be the case.