jevd

Thanks MJB, I wasn't aware of the exemption. Not my area of knowledge.

If trustee doesn't report, who does? The taxpayer? I realize this isn't the best case and I agree that the trustee shouldn't be liable to report the gift. I just believe it puts the trustee in an uncomfortible situation. Does the trustee notify the beneficiary that a non-qualified disclaimer has other tax implications and they should seek advice from their tax professional? Some custodians/trustees will not accept a non-qualified disclaimer. I'm not sure what the correct procedure should be. What do the attorneys have to say? PS . I believe the limit is $ 11,000

A qualified disclaimer must be within 9 Months of date of death. Account owner died 10 years ago. Does your plan accept non-qualified disclaimers? If so, how do you get around Gift Taxes for amounts over the annual limit?

If she turned 70 1/2 in 2007, no traditional IRA contribution is allowed. The entire amoount of the excess rollover plus earnings ( the amount of the RMD from the QP) must be removed.

Thank You Appleby for the reminder. Amen & May God Bless.

R.I.P.

And for thos of you who have never heard it . You may read or listen to it here. Who's on First?

SAY THANK YOU TO YOUR DENVER FRIENDS> ROCKIES SWEEP YANKEES. WHO WOULDA THOUGHT. and yes I was shouting. Thought it was appropriate.

Thanks All. Out yesterday so couldn't respond. Spent the day with an electrician. BTW never buy a house with aluminum wiring. They were built during Vietnam war period. 65-75 or so. All outlets and switches need to be "Pigtailed" at a cost of about $25 per. OINK!!! PS: Sorry about the wrong forum. I thought i was in the general area when I posted.

I know Rollovers are irrevocable from a QP to an IRA. I just can't find where it says so. I've searched my sources i can find secondary sources (Appleby's article on Investopedia) but can't find a primary source. I know its out there. Please help. Thanks

Not in any numbers recently. We periodically get a call on this issue. I'll check and let you all know what happens. I just read the treaty currently listed on the IRS website and saw no reference to rollovers of non-US Retirement Plans.

Thanks WDIK for the sites. And I agree that once your over the 100K limit you should continue to file until and through plan termination.

JanetM, I'm talking about someone who filed for a year when all plans totaled in aggregate less than 100K and have never reached the limit. Filed by muistake because he thought he had to. Plans still total less than 100K. Is he required to file since he has filed in past even though not required?

I have a related question regarding 5500 EZ filing. I know that once a one participant plan or combination of plans exceeds the 100K limit( 250K as of 07 PYEs.) as of the end of a plan year that a 5500 EZ is required. I also know that a form is required for the final plan year regardless of plan size. However, it is an understanding by some that once a form is filed, you must continue filing the form even if the plan never exceeded the $ limit. I have checked the instructions for 5500 EZs and several commentaries. but cannot find the requirement if the plan value never exceeded the limit.

She may rollover the funds to her IRA as long as she takes the rmd for the year of death if not already taken. I'd find another trustee if they insist she can't rollover the funds. I would also seek the aid of the trustee's Compliance dept. or a higher level employee than the front line client services. As with the IRS it is often the case that the frontline people don''t know all they need to know. Pursue the higher ups and if no luck try a different trustee. See below from Preamble to RMD Final Regs: From the Preamble to the final RMD REGS >Election of Surviving Spouse to Treat an Inherited IRA as Spouse's Own IRA These final regulations generally retain the clarifications in the 2001 proposed regulations regarding how and when a surviving spouse of a deceased IRA owner can elect to treat an IRA inherited by the surviving spouse from that owner as the spouse's own IRA. The 1987 proposed regulations provided that this election is deemed to have been made if the surviving spouse contributes to the IRA or does not take the required minimum distribution for a year under section 401(a)(9)(B) as a beneficiary of the IRA. Under the 2001 proposed regulations, this deemed election is permitted to be made only after the distribution of the required minimum amount for the account, if any, for the year of the individual's death. These final regulations provide that the election can be made at any time after the IRA owner's date of death, while clarifying that the minimum required distribution for the calendar year of the IRA's owner's death is determined assuming the IRA owner lived throughout the year. These regulations also clarify that the surviving spouse is required to receive a minimum distribution for the year of the IRA owner's death only to the extent that the amount required was not distributed to the owner before death. Some commentators raised concerns about the other clarifications in the 2001 proposed regulations. The 2001 proposed regulations clarified that a deemed election is permitted only if the spouse is the sole beneficiary of the account and has an unlimited right to withdraw from the account. This requirement is not satisfied if a trust is named as beneficiary of the IRA, even if the spouse is the sole beneficiary of the trust. SEE HERE As explained in the 2001 preamble, these clarifications make the election consistent with the underlying premise that the surviving spouse could have received a distribution of the entire decedent IRA owner's account and rolled it over to an IRA established in the surviving spouse's own name as IRA owner. If the spouse actually receives a distribution from the IRA, the spouse is permitted to roll that distribution over within 60 days into an IRA in the spouse's own name to the extent that the distribution is not a required distribution, regardless of whether or not the spouse is the sole beneficiary of the IRA owner. Further, if the distribution is received by the spouse before the year that the IRA owner would have been 70½, no portion of the distribution is a required minimum distribution for purposes of determining whether it is eligible to be rolled over by the surviving spouse.

SECTION 1103 of PPA see below; . 1103. REPORTING SIMPLIFICATION. (a) Simplified Annual Filing Requirement for Owners and Their Spouses- (1) IN GENERAL- The Secretary of the Treasury shall modify the requirements for filing annual returns with respect to one-participant retirement plans to ensure that such plans with assets of $250,000 or less as of the close of the plan year need not file a return for that year. (2) ONE-PARTICIPANT RETIREMENT PLAN DEFINED- For purposes of this subsection, the term 'one-participant retirement plan’ means a retirement plan with respect to which the following requirements are met: (A) on the first day of the plan year-- (i) the plan covered only one individual (or the individual and the individual's spouse) and the individual owned 100 percent of the plan sponsor (whether or not incorporated), or (ii) the plan covered only one or more partners (or partners and their spouses) in the plan sponsor; (B) the plan meets the minimum coverage requirements of section 410(b) of the Internal Revenue Code of 1986 without being combined with any other plan of the business that covers the employees of the business; © the plan does not provide benefits to anyone except the individual (and the individual's spouse) or the partners (and their spouses); (D) the plan does not cover a business that is a member of an affiliated service group, a controlled group of corporations, or a group of businesses under common control; and (E) the plan does not cover a business that uses the services of leased employees (within the meaning of section 414(n) of such Code). For purposes of this paragraph, the term 'partner’ includes a 2-percent shareholder (as defined in section 1372(b) of such Code) of an S corporation. (3) OTHER DEFINITIONS- Terms used in paragraph (2) which are also used in section 414 of the Internal Revenue Code of 1986 shall have the respective meanings given such terms by such section. (4) EFFECTIVE DATE- The provisions of this subsection shall apply to plan years beginning on or after January 1, 2007. (b) Simplified Annual Filing Requirement for Plans With Fewer Than 25 Participants- In the case of plan years beginning after December 31, 2006, the Secretary of the Treasury and the Secretary of Labor shall provide for the filing of a simplified annual return for any retirement plan which covers less than 25 participants on the first day of a plan year and which meets the requirements described in subparagraphs (B), (D), and (E) of subsection (a)(2).

I wasn't aware that the first $$ to come out of a plan was deemed to be the rmd. Do you think that would be the case even if he has been taking for several years - a fairly consistent monthly distribution? Yes. Regs under IRC 401(a)(9) state that First $ out are deemed RMD $. If at the end of the year all is satisfied, I don't know what the problem would be except that the letter of the law was not followed and it could invalidate part of the rollover. Timing is everything. It might be better to just take the RMD first and stop the monthly distributions for this year only. Then there is no question. BTW There is pending legislation in both houses supported by all that will make Qual;ified Charitable Distributions permanent. When it will be passed is another matter.

I believe it can be done but be careful. He probably needs to satisfy his RMD first as the first distribution of any kind is deemed to be an RMD not allowed to be rolled over. After the RMD is satisfied, then do the rollover to the IRA. Also be sure the check from the IRA is made payable directly to the " Qualified Charity" >

Mike Preston, Just a slight clarification regarding the removal of an Excess contribution to an IRA. Excesses may be removed by Tax Filing Date plus extensions and an extension request need not be on file. See form 5329 instructions. JEVD

IRS Notice 87-16HERE.

There is always confusion on this issue. Profit Sharing Plans and SEPS are discretionery. For Discretionery plans, active participation is determined by the year "IN WHICH" the contribution is made. There is a special rule for employers that make two years contributions to discretionery plans in the same year. Active participation is deemed to exist in the following year as well. Pension Plans require a contribution. For these type of plans, active participation is determined by the year "FOR WHICH" the contribution is made. That way an employer that makes a discretionery contribution can make it after w-2s are due and not have to correct their reporting I wish I could give you a site but this is my quick answer. I'll try to post the code specific answer later.

Contributions to a ROTH IRA must be in cash unless its from a qualified rollover from another Roth IRA or a conversion from a Traditional IRA. Next year direct conversions from Qualified Plans and 403(b) plans will be allowed. I'm not an accountant or attorney. I can't answer your DRIP tax question.

Here's one to ponder. No Apparent Guidance on this. A qp or 403(b) plan has a deceased participant who has a non-spouse beneficiary. The participant died 1998. Non-spouse beneficiary has been taking annuity style distributions from the plan in accordance with the one year rule. The latest newsletter from the IRS says that a direct rollover from the qp or 403(b) must be accomplished before the end of the year following the year of death to be eligible for the annuity method. However, what if those distributions were already being done from the qp? Can a direct rollover be accomplished and still retain the annuity rule? Also what if the death was after RBD?

Has anyone thought how a failed or ineligible conversion from a Qualified Plan to a Roth IRA will be re-characterized? I know this is a 2008 issue. 1. Return to QP with gains/losses? ( but what if the qp is terminated?) 2. Re-characterize to a Traditional IRA? But then how is it reported on form 5498? Just something to think about when we have nothing else to do. Whenever that is.

Gary, Did you happen to see if they post a copy of the IRS approval letter for this prototype?