Can 1999 Roth contributions be made into a 1998 Roth conversion or do I need to set up another account?

Does anyone have an authoritative cite on how to handle a distribution of an ADP excess to a deceased participant? The participant died very recently and his account balance in the plan is still intact.

The plan administrator would like to have the refund check made payable to the spouse (beneficiary).

I believe that the 1099R should be done on the deceased's ssn for inclusion as income on his final tax return. I would like to confirm this. Also, does this create a problem in making the refund check payable to the spouse?

Thanks for any help.

[This message has been edited by Beavis (edited 12-09-98).]

Do all SAR-SEPs need a new form 5305A-SEP this year. If so, why?

Is anyone familiar with any authority after the Citrus Valley Estates, Inc. case that concluded that interest rate assumptions less than 5% were reasonable? I'm looking at a situation where a 3% rate was used with a NRA of 45. Trying to persuade IRS to accept 4% interest rate. Thanks. Ed

I have two questions: (1) Is it appropriate to provide a domestic relations order exception to the exclusive benefit language required in the trust? (2) Can you provide for reasonable Plan/Trust expenses to be paid from trust assets? It would appear to me that the answer to the first is no and that you can pay legitimate expenses from the trust but I would appreciate other comments. Thanks.

How are people handling QDRO's when there is an outstanding loan in the participants account? The alternate payee does not want the loan responsiblity. Example: alternate payee is awarded 60% of total account balance. Account contains 50K in cash and a 50K note(loan). What langauage protects the alternate payee so that when the loan is paid back, the alternate payee receives the payments. What happens if the participant defalults? Any protections?

If a small 401(k) plan covers one hce and 2 or three nhces and the company offers a safe harbor match and none of the nhce's defer, can the hce still defer the full 402(g) limit since there is no ADP test?

If separate accounts are no longer required for Roth Conversions and Roth Contributions, how is the 5 year distribution period determined for subsequent yearly contributions when the conversion was made in 1998?

What I am assuming you wish to do is have the contribution posted to the individual accounts but not perform the investment buys associated with that contribution. This way you have the contributions in the system to perform the necessary testing.

Assume the following:

Plan year is 10/1/97 - 9/30/98.

Employee deferrals for the last month of the plan year are deposited after 9/30/98.

Matching of deferrals for the last month of the plan year are deposited after 9/30/98.

To have the contributions posted to the 9/30/98 plan year without having to perform the associated investment buys you could do the following:

1. Establish an Employee Receivable account and an Employer Receivable account along with the other investment accounts. The account type used for these accounts should be Employee Receivable and Employer Receivable, respectively.

2. To post the contribution, input the Employee Receivable investment in the ACCOUNT # on the contribution transaction input screen, with the same being done for the Employer Receivable contribution. Also select the appropriate contribution type EE-Pre-tax, ER-Pre-Tax Match etc.)

3. Post the transactions as you would normally although this does require the posting of Employee and Employer contributions separately. (The Confirmation Required should not be selected for the posting).

4. The contributions will now show on the participant statements under receivables, have the data in the system for testing, but not require you to actually perform the investment buys.

When you actually do the investment buys for the "receivable contributions" you will perform the following (which should be in the following plan year):

1. Use a Transfer/Exchange transaction, selecting the Transferring Receivables option, to transfer the Employee Receivable account into the Employee Deferral.

2. Use a Transfer/Exchange transaction, selecting the Transferring Receivable" option, to Transferring Receivable to transfer the Employer Receivable account into the Matching.

3. If Confirmation Required for the above two transfer/Exchanges is selected, perform the investment buys as instructed.

I'd check the 1040 Form to be sure, I think the answer is Yes to all of your questions.

If one converted to a Roth in August and then later recharacterized to the traditional IRA and now finds that the original August conversion date will be most beneficial, is there a way to recharacterize backwards to the original conversion date? Is there a way to just "undo" the recharacterization? (Market timing is tough and made tougher by brokerage firms paper processing delays.)

I would appreciate input regarding the manner in which the Calif. FTB treats Roth IRA conversions. Does the amount converted have to be declared as ordinary income as with the IRS? If not, how are the future distributions treated ? Any help will be appreciated.

I am 62 years old and have some money in a

Tax Sheltered Annuity (TSA). Can I transfer

$2000 of this TSA and invest it in a Roth IRA? Please let me know if this is allowed by

the company that is handling my TSA.

I have been told that I can convert an IRA which I currently have in a traditional IRA in a mutual fund to to Roth IRA at no cost. A traditional IRA which I currently have invested in common stock (GE and IBM) will require a commision fee; commission fee to withdraw and a commission to reinvest/ rebuy. Is this correct ??

An individual died after payments had commenced from an IRA. Payments were based on individual's life expectancy (not recalculated. Individual's spouse is beneficiary. (1) What are her options? (2) Over what period is she required to receive distributions from the IRA? Any thoughts? Thanks. Ed

Are couples eligible to make 1998 Contributory Roths if their 1998 AGI exceeds $160,000 because of Roth conversions (income + Roth conversion amount > MAGI)?

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.