IRAs, 401(k)s and similar retirement savings vehicles have experienced phenomenal growth over the past several years, both in terms of the number of participants and in the sheer dollar value of those accounts. Unfortunately, the opportunities to run afoul of the qualified withdrawal rules also have grown. These missteps by account owners have not gone unnoticed by either the Internal Revenue Service or the courts.

Failed rollovers and disqualified distributions have become one of the handful of "big-dollar" mistakes that can be made by the "average" taxpayer. Not only is a disqualified distribution or rollover immediately taxed as income but, often, a 10 percent penalty is also imposed.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access