A rollover occurs when an individual actually receives a check from an IRA custodian, which is payable to themselves. They physically take possession of the account assets. A transfer and direct rollovers occurs when an individual never actually takes possession of the account assets. The check is either sent directly to the new IRA custodian or the check is sent to the owner, but made payable to the new custodian.
In a rollover, an individual may withdraw all or part of an IRA account and roll it over to another Traditional IRA, or return the proceeds to the IRA account. The rollover or return, however, must be accomplished within 60 days, or it is considered a distribution and subject to taxes and penalties. IRA rollovers can occur only once every 12 months.
