The “Same Property” Rule on IRA rollovers

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  • #26451

    I ran into an interesting situation I can’t seem to find an answer to.

    TIRA owner has 2,000 shares of LMT he’s been accumulating over the years in his TIRA. He officially retired in March along with already retired spouse, and they project household taxable income this year will be about $70K, as they have not yet began a pension or Social Security. TIRA owner would like to know if he can do a rollover on the 2,000 LMT shares to a taxable account on May 24. The stock goes Ex-Dividend May 28, the record date is June 1 and paydate June 25, and then transfer the same 2,000 shares back into the TIRA after June 25, meeting the 60 day once-per-12-month rule. If so, will the $5,200 in dividends be reported on the 1099-DIV for the taxable account? As I understand it, the IRS “Same Property” requires the 2,000 shares be returned regardless of their change in value. If so, the advantage of this strategy is these qualified dividends will be taxed at the 0% rate, assuming his taxable income (including the dividends) is under the $80,800 cap. for 2021.




    Good day! Tell me, did you find a way out in your situation?

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