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Is a transfer of funds from a TSP account to a traditional IRA considered a contribution to the traditional IRA?

 
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2 Replies

Is a transfer of funds from a TSP account to a traditional IRA considered a contribution to the traditional IRA?

@willjonseth 

 

No, it is not a contribution.   Contributions are very limited, $$-wise, as to how much can be "Contributed"..... A direct-transfer, or a rollover from a TSP account to an IRA is not $$-limited.

 

IF a 1099-R is issued for that transfer, you enter it as a distribution in the software, and the follow-up questions vary depending on exactly what codes are in box 7. 

IF box 7 contains a letter "G", that indicates a direct-transfer, and you just need to indicate in the follow-up questions whether it went into any kind of ROTH account...if it didn't go into a ROTH account, then a Traditional IRA is assumed.

IF box 7 is some other number, then they issued a check, and in the follow-up questions you need to indicate that it went into another retirement account, and then exactly how much went into the IRA (because some people keep some of the $$ and don't put it all back into the IRA, and also any withholding kept on distribution did not end up in the new IRA unless YOU made up the difference) 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Is a transfer of funds from a TSP account to a traditional IRA considered a contribution to the traditional IRA?

Rollovers and conversions are not a new contribution.  Only enter it from the 1099R, nowhere else.

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