[Topic is now in Personal Finance (Not Investing) - mod mkc]
I'm assisting my mother in transferring retirement assets from a pre-tax TSA/403b held in an annuity at Brighthouse Insurance company into a recently opened Fidelity Rollover IRA with a zero balance. I'm also transferring an annuity from a Roth account at Brighthouse into a recently opened Roth IRA at Fidelity.
Since I was attempting to transfer both accounts simultaneously, Brighthouse mistakenly put the Fidelity Roth IRA account number on the Brighthouse check containing the pre-tax TSA/403b funds causing these funds to be deposited into the Roth IRA and not the Rollover IRA at Fidelity.
We have been in contact with Fidelity and Brighthouse to have the funds moved into the right account, but this is proving more complicated than expected. Fidelity is requesting very specific documentation from Brighthouse indicating that these funds were in fact pre-tax before moving the funds from the Roth IRA into the Rollover IRA.
We've contacted Brighthouse multiple times but each time they send us documentation, it doesn't specifically indicate the tax status of the contributions so Fidelity continues to refuse to transfer the funds into the Rollover IRA account.
Fidelity keeps stating that, "since the direct transfer isn't reportable to the IRS by either Fidelity or Brighthouse, we have plenty of time to resolve this". I don't understand how this can be possible since that would pretty much represent a loophole for transferring pre-tax funds into a Roth account without ever paying tax on the conversion.
Does this sound crazy to anyone else? Any ideas on how to resolve this? My mother was not planning of doing a Roth conversion (at least all at once), and obviously has no interest in trying to take advantage of Brighthouse's error and have pre-tax money placed into a Roth account without the IRS catching wind of it.
I'm assisting my mother in transferring retirement assets from a pre-tax TSA/403b held in an annuity at Brighthouse Insurance company into a recently opened Fidelity Rollover IRA with a zero balance. I'm also transferring an annuity from a Roth account at Brighthouse into a recently opened Roth IRA at Fidelity.
Since I was attempting to transfer both accounts simultaneously, Brighthouse mistakenly put the Fidelity Roth IRA account number on the Brighthouse check containing the pre-tax TSA/403b funds causing these funds to be deposited into the Roth IRA and not the Rollover IRA at Fidelity.
We have been in contact with Fidelity and Brighthouse to have the funds moved into the right account, but this is proving more complicated than expected. Fidelity is requesting very specific documentation from Brighthouse indicating that these funds were in fact pre-tax before moving the funds from the Roth IRA into the Rollover IRA.
We've contacted Brighthouse multiple times but each time they send us documentation, it doesn't specifically indicate the tax status of the contributions so Fidelity continues to refuse to transfer the funds into the Rollover IRA account.
Fidelity keeps stating that, "since the direct transfer isn't reportable to the IRS by either Fidelity or Brighthouse, we have plenty of time to resolve this". I don't understand how this can be possible since that would pretty much represent a loophole for transferring pre-tax funds into a Roth account without ever paying tax on the conversion.
Does this sound crazy to anyone else? Any ideas on how to resolve this? My mother was not planning of doing a Roth conversion (at least all at once), and obviously has no interest in trying to take advantage of Brighthouse's error and have pre-tax money placed into a Roth account without the IRS catching wind of it.
Statistics: Posted by GatorMD — Thu Nov 07, 2024 7:09 pm — Replies 2 — Views 280