What Cannot Be Rolled Over Into An IRA?

Thursday, June 20th 2024

Individual Retirement Accounts (IRAs) provide individuals with an ideal means for saving for retirement while reaping certain tax advantages. An IRA may be funded in various ways including direct contributions, transfers, and rollovers from various retirement plans such as 401(k)s or 403(b), among others; but not all assets can be converted to an IRA without incurring immediate taxation – this comprehensive article explores which assets cannot be placed into an IRA account.

Not All Distributions Can Be Rolled Over

Unfortunately, not all employer-sponsored plan distributions qualify to be rolled over into an Individual Retirement Account (IRA), as stipulated by the Internal Revenue Service (IRS). Examples of distributions which cannot be transferred over include:

Other Kinds of Investment Assets

IRAs are intended to hold traditional investment assets like stocks, bonds and mutual funds; other kinds of assets – like collectibles such as artwork, antiques rugs metal gems – cannot typically be placed inside an IRA due to potential tax consequences associated with purchasing them with funds from within an IRA; instead they’d be considered distributions that require payment of income tax in that year; with some exceptions like holding certain forms of gold, silver platinum palladium bullion can hold within an IRA account.

Contributions that Aren’t Tax Deductible

Non-deductible contributions made to traditional IRAs cannot be transferred over into Roth IRAs and it’s important that any non-deductible contributions to traditional IRAs be monitored to prevent tax complications down the line.

Life insurance policies: Unfortunately, life insurance contracts cannot be transferred into an Individual Retirement Account (IRA). Although you are permitted to hold one within an employer-provided retirement plan, the IRS prohibits this transfer into an IRA.


Knowing which assets cannot be transferred to an IRA is equally important to understanding what can. Adherence to IRS guidelines on rollovers will aid in avoiding tax consequences and penalties. While this guide offers a comprehensive list of assets that are not changed, it is important to remember that the rules governing IRAs are often subject to change and become more complicated; for best results it’s advisable to consult a financial advisor or tax expert when making these decisions about rollovers.

Importantly, while IRA rollovers offer significant tax advantages, there are also restrictions limiting them. For instance, the IRS limits how frequently one may conduct rollovers between accounts to once every year in order to deter individuals from continually moving money between accounts to avoid taxation.

If you are considering an IRA rollover, take time to thoroughly understand both its potential advantages and drawbacks. Your individual financial circumstances and retirement goals may impact which option would work best; making an informed decision that supports an overall retirement strategy should always be your goal.

Noting the tax implications of an IRA rollover depends on its particulars; direct transfers where funds move directly between retirement accounts do not generally trigger any taxable events; indirect rollovers could trigger mandatory withholding for federal income taxes on amounts received and then deposited directly back into another retirement account within 60 days (known as indirect rollover).

If you are considering rolling over non-traditional assets like company stock or real estate into an IRA, be aware that such transactions can be complex and may come with special tax consequences. Please consult a financial advisor or tax professional so you fully understand the potential advantages and drawbacks of doing this.

Overall, Individual Retirement Accounts provide a flexible and tax-advantaged way of saving for retirement; however, not all assets may qualify to rollover into these accounts. By understanding the rules governing rollovers for an IRA account, you can make more informed decisions that align with your financial objectives while helping ensure a safe retirement. When making significant financial decisions it’s wise to consult a knowledgeable financial professional for guidance tailored specifically for you and your circumstances.

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