I have Roth IRA CDs maturing after five years. If I take the cash, is the interest tax-free, or must it be reported as 2019 income? If I move these IRAs to another bank instead, can I take the check to the other bank myself or must it be done as a bank-to-bank transfer?

If you've owned a Roth IRA for five years and you're over 59 1/2 years old, the interest is tax-free. You don't have to report it.

It's best to move any type of IRA as a trustee-to-trustee transfer — for example, by having Bank A transfer your money electronically to Bank B, or by having Bank A give you a check made payable to Bank B not to you. The alternative is a rollover: taking a check payable to you and depositing it within 60 days in a new IRA or Roth IRA.

The catch: You're only allowed one IRA-to-IRA rollover every 12 months. That limit applies to IRAs and Roth IRAs in aggregate: If you do an IRA-to-IRA rollover today, you must wait 365 days before you can do another IRA-to-IRA or Roth IRA-to-Roth IRA rollover, said Ed Slott, a Rockville Centre tax accountant. (Note: The limit doesn't apply to rollovers from IRAs to Roth IRAs, or between 401(k)s and IRAs.)  

"If you did an IRA-to-IRA rollover on Nov. 10, 2018, you must wait until Nov. 10, 2019, to do another," Slott said. "If you do a second IRA-to-IRA rollover in January 2019, it becomes a taxable distribution." A disqualified rollover that applies to a tax-free Roth IRA would be tax-free, but not cost-free, said Slott. Next week, I'll explain why.

The bottom line

It's prudent to move IRAs between custodians in a trustee-to-trustee transfer.

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