Does a transfer between two Roth IRA accounts from different companies count as a contribution?

[haveridley]

In 2017, I had $1,200 (plus ~$40 in gains) in one Roth IRA account that I transferred to another Roth IRA account in 2018. Does this count as a contribution in addition to the money I placed within the latter account? In that same account I deposited $3,000 in contributions for the 2017 year but had already taken out $2,000 of that for 2018. Does this mean that my annual contribution for 2017 is $3,000 or $4,200?

[macuser_22 · Accepted solution]

No.  If done properly as a trustee-to-trustee transfer simply switching accounts or custodians should not even generate a 1099-R and would not be reportable .

[haveridley]

Thank you! Would this mean that the individual contributions I had initially made to each trustee be combined for the annual contribution, or would it only count for the trustee that everything has been transferred to?

[macuser_22]

Your contribution is new money that you put into a Roth.   You said you *had* $1,200 in the Roth.  If that was a prior year contribution then it is not a 2017 contribution.

[haveridley]

My apologies, I had meant that the $1,200 was also a 2017 contribution. In that case, I assume then that both amounts would combine.

[macuser_22]

For tax purposes you only have one Roth IRA which is the aggregate total of all Roth accounts.  It does not matter what account a contribution is made to.  The contribution for the year is the total of all Roth contribution for that year to any Roth account.

[haveridley]

Thank you!