How can I do a second IRA rollover in the same year without being penalized?

Earlier this year I did an IRA rollover. Last week I requested a check from my custodian to do another rollover, but now I find there is a one-time-per-year rule against multiple rollovers. I have the custodian's check in hand but haven't completed the rollover. How can I deal with this without the penalty? I am 70 years old.

You are not going to incur a penalty, being that you are 70 years old. The issue for you is whether or not you want the full check amount included in your gross income. A distribution from a traditional IRA may be excluded from gross income if you roll over the distribution to another traditional IRA or return it to the same IRA. Once you have made a tax-free rollover, you must wait at least one year from the date of receipt of the amount withdrawn before becoming eligible to engage in another rollover. 

The once-per-12-month rule applies on a taxpayer-by-taxpayer basis. The once-per-12-month rule does not apply to trustee-to-trustee direct transfers. The short answer to your question is, do a direct transfer.

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Answered by: Richard L. Ward, CPA, is president and CEO of Capital Configuration LLC in Pittsburgh.