Has anyone here handled an inherited IRA, for a client over age 70 1/2, who may wish to convert the inherited IRA to a Roth IRA?

My facts have a client inheriting an IRA from her husband, who died in 1998. It appears that the first required minimum distribution attributable to that inherited IRA will not have to be made until December 31, 1999.

This minimum distribution will likely be over $100,000. The client is considering part of the IRA to a Roth IRA. I am wondering if the 1999 required minimum distribution will somehow implicate the $100,000 modified AGI limitation in 1998, even though the required minimum won't have to be distributed until 1999.

My interpretation is that the 1999 minimum distribution will not impact the 1998 modified AGI limitations, but wonder if anyone here has already looked at this issue.

Thanks!

I am over 59-1/2 and when I retired,I rolled my 401k into a traditional IRA. I am not working, thus no taxable income.

Can my IRA be rolled over to a Roth?

What are the advantages and will I have any tax obligation by doing so?

If an employer purchased an existing business in August, can he start a SIMPLE plan beginning in 1999? I know an employee must work two years to be eligible to participate, but I wasn't sure about a new business. Also, the business has locations in different cities. Must the employer offer the plan to the employees at all locations?

I just finished reading the article linked in the What's New section, and it reminds me of a debate I had with co-workers 20 and more years ago: should the regulations from ERISA governing qualified DB plans be applied to Social Security, including minimum funding, amoritzation of the unfunded liability, etc.? Ignore for the moment that we are not concerned with deductibility (though maybe we should be concerned? How about that, FICA employer portion as deductible contribution?).

Radical notions all; give your radical ideas or your reactions to them.

We have an employee of a client whose spouse must have special care during the day due to having alzheimer's disease. She was wondering what would happen if he got worse and had to go to a nursing home or if he got better and needed less care -- could she change her election? I told her that I didn't think that this would qualify as a change in status & that her original election would remain. Is this correct in both cases?

I would like feedback on the pros and cons of introducing a corporate vitamin

plan, whereby the company would supply

employees with factory fresh multi-vitamins

as part of the wellness program.

1998 calculations for quarterly payments were based on income excluding Roth conversion income. Will there be a tax penalty for underestimation of tax payments?

Hello all,

I am new first time father and would like to know if I can setup a Roth IRA for my child?

Can I invest in a ROTH IRA even if I max out on a 401(K) plan?

If I max out on the 401(K) is it still possible to put the allowable amount to a ROTH IRA?

I wish to rollover my 401K Rollover IRA to a Roth IRA. I already have a Roth IRA consisting of after tax money (contributions, and conversions from traditional IRA's). Should I keep the 401K money in a separate Roth IRA from my existing one? I'm not planning on making any withdrawals until retirement age. Thanks.

Please help me. I am quite confused on one technical aspect of conversion to the Roth IRA. In particular, I need to know if the 10% additional tax on premature distributions applies if a taxpayer is older than age 59½ at the time of conversion. I am wondering mainly about possible distributions, within the first five-taxable-year period, of amounts converted to a Roth from a traditional IRA.

Several experts on the Roth IRA website specifically indicate that a taxpayer that old is not subject to the 10% penalty. However, IRS Publication 17 (11-13-98) does not mention an exception for age when discussing this topic on page 127. Nor do Form 8606 and its penalty instructions on page 6. Form 5329 does mention age 59½, but page 6 of the Form 8606 instructions also states that Form 5329 instructions should be disregarded.

Right now I have no such 10% penalty. Naturally, I would like to know the downside before I convert.

If a 5% owner participant in a profit sharing plan, DOB sometime in 1926, has not started taking his RMD as of today, what are the corrective measures that can be taken?

can you convert 401(k) funds into a traditional IRA and then into a Roth IRA?

Also, can you move the after-tax dollars in the 401(k) into a Roth IRA somehow?

An employer sponsors a DB plan with a non-integrated safe-harbor formula and a super-integrated PS plan. Both plans cover all ee's of the employer and independently meet the 70% 410(B) test. When doing the cross-testing on the PS plan, do the DB accruals need to be included in the 401(a)(4) calculations?

I am interested in know of any salary surveys (particularly in the Pacific NW area) indicating salary ranges for the position of Compliance Specialist (10+ yrs of experience). Responsibilities include handling technical questions from Plan Administrators, Producers, and clients; controlled group determinations, review and approval of plan design, drafting documents & preparing IRS submission; high level testing & resolution of compliance issues. Any input is appreciated.

I am 55 and will retire in 2 years. I am in the 28% tax bracket. If I convert a portion of my regular IRA to a Roth before 12/31/98 as recommended by the Forbes calculator, I will owe a lot of taxes over the next four years. My tax rate after retirement will be 15%. This means that I will pay taxes at the rate of 28% for the first two years, and 15% for the next two.

I will not need to withdraw from my Roth for at least 10 years. WHY SHOULD I CONVERT THIS YEAR? I plan to convert a portion each year AFTER retirement, if that is allowed. I propose to convert 1/4 of the recommended amount by Forbes each year for four years.I will pay tax all four years at the 15% level. tax, for the same dollar amount of conversion. Even accounting for 10% annual market increases, the total taxes should be less. What do others out there think?

Thanks,

Walt T.

Previously, I asked a question about compensation and limits for LLC/LLPs and partners. I now have a more specific question....If a partner receives two types of compensation from a partnership (in particular a LLP), what compensation is used for their SEP contribution limit. In my case, the partner receives a W-2 with significant compensation, as well as a K-1 from the partnership as a limited partner (with some self-employment or "flow-through" earnings). Does the partner get to receive a contribution on the W-2 compensation - or is it limited to the SE Income from the actual partnership operations? I realize on the SE Income (absent the W-2 compensation) that the employee/partner is subject to the "circular" formula for contribution limit purposes.

[This message has been edited by derek (edited 12-07-98).]

I am looking at Q 8:19 of the Simple, SEP and SARSEP Answer Book by Panel Publishing and have a question. If a SEP is top-heavy, and the employer usually makes contributions of 15% of pay, can they just treat 3% of the contribution as a top-heavy minimum (made for all employees) and thus not have to make any additional contributions? Q-19 indicates that the minimum required top-heavy contribution may be made to all employees (assuming no other limits are exceeded).

We have taken over the administration of a 401(k) plan which offers company stock as an investment option (publicly traded). The prior TPA did not maintain a cost basis on the stock. I believe that I need a cost basis because the plan allows for participants to take distributions in company stock. I also believe that if an employee takes the stock and does not roll it over, they are only taxed on the cost basis until they actually sell the shares. Is there a general formula for me to use so that I can arrive at a cost basis and then calculate it on an ongoing basis ?

Thank you.