Is a trustee-to-trustee IRA transfer taxable?

The rule

The wording in Publication 590-A (2025) is short. A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee’s request, is not a rollover. Because there is no distribution to you, the transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers. The publication points to its Direct rollover option discussion for transfers from retirement programs other than traditional IRAs. The practical result is that the same dollars are taxed very differently depending on whether they pass through your hands or move between institutions.

The check made out to the new trustee

The publication specifically includes a common practical case: the current trustee issues a check to the new trustee but gives it to you to deposit. That is still a trustee-to-trustee transfer, because the money was never distributed to you. The reasoning matters for how you handle the paperwork: a check that is payable to you personally is a different thing. It is a distribution to you, it starts the 60-day clock, and it can use up your one IRA-to-IRA rollover for the year. If you are unsure which you have, ask the old custodian how the check is made out before you deposit it.

How it compares with a 60-day rollover

A rollover in the publication’s terms is a distribution to you that you contribute to another plan within 60 days. It is tax free only if you meet the deadline, redeposit the same property, and have not already used your one IRA-to-IRA rollover for the year. A direct transfer avoids all three problems. There is no 60-day deadline, you cannot trigger the once-a-year limit, and nothing is included in income. The calculator above shows the difference using your own numbers: enter the amount moved and see $0 of income for a transfer, compared with the income, and the possible 10% additional tax, if you had taken the money and missed the 60 days without a waiver.

Worked example

You have $40,000 in a traditional IRA with no basis and want to move it to a new provider. Option A: you ask the new provider to pull the funds directly. You include $0 in income and owe no tax. Option B: the old custodian sends you a check payable to you for $40,000 on March 3 and you redeposit it on May 20, which is day 78. Without a waiver, the whole $40,000 is taxable that year, and if you are 45 and no exception applies, the additional 10% tax is $4,000. Even a deposit on day 60 would have used your one IRA-to-IRA rollover for the following twelve months. Option A has no such risk. Compare how the 60-day rule works.

Where transfers are required

The publication also notes cases where only a direct transfer will do. If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat it as your own and you cannot roll amounts into or out of it, but you can make a trustee-to-trustee transfer as long as the receiving IRA is set up and maintained in the name of the deceased owner for your benefit as beneficiary. A non-spouse beneficiary of an employer plan must likewise use a direct trustee-to-trustee transfer into an inherited IRA. A recharacterization of a contribution is made by the same kind of transfer, and nondeductible amounts distributed from an employer plan can be moved only by direct trustee-to-trustee transfer.

Reporting and records

The publication notes that a sponsor reports a contribution to an IRA unless it was made by a trustee-to-trustee transfer, which is another way of saying the transfer is not treated as a new contribution. Keep the transfer confirmation and the statements from both custodians so you can show the money moved between institutions. If a form you receive reports the move as an ordinary distribution, ask the custodian to correct it before you file. See also the one-rollover-per-year rule.

Sources

• IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) (2025): Trustee-to-Trustee Transfer; Rollovers; Direct rollover option; What if You Inherit an IRA?. Read November 2, 2026.

Edition read: Publication 590-A (2025), for use in preparing 2025 returns, including its What’s New for 2026 note. Dollar limits and dates are for the year stated; check the current publication and form instructions for your tax year. This page summarizes the publication and does not replace it.