BPickerCPA

You can take your own contributions out at any time without tax or penalty. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

You made a mistake in having tax withheld. While it's true that the amount of the Roth conversion does not count for purposes of determining roth conversion eligibility, the tax withheld is both taxable and subject to 10% early withdrawal surtax. IN addition, since that amount was NOT converted, it's included towards the $100,000. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

There are currently no limitations. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

The I in IRA stands for INDIVIDUAL. You each need to have your own INDIVIDUAL account. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

Contact the custodian and tell them that you need to remove an erroneous contribution. You CANNOT recharacterize it back to a traditional IRA, you must remove it as well as any applicable income. Hopefully the custodian will compute that amount. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

Twelve years, and now someone is first waking up? I can't believe that the client didn't realize it when he was getting 1099's on a tax free account. Anyway, to answer your queries-- 1. There is no provision in the code to allow you to gain basis in an IRA by reporting income on the account. 2. As for correcting the account, you should go to the IRS for a ruling. I doubt you'll get it, but I've been surprised before. However it seems that if there was a distribution 12 years ago that was untaxed, the statute of limitations is way gone. Maybe you should leave it alone and pay the tax on the earnings and not worry about paying tax on later distributions. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

There is a user fee to get an official IRS ruling, but I don't believe it is that high. My opinion is that you don't need a ruling. This has been approved so many times it isn't funny. What you may need is a new attorney. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

The roth IRA is fine, it's the tax returns that are wrong. Amend them. Since the 4 year spread is the default, that's the way to report the income. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

John, Basically the way to handle multiple accounts is just to compute the RMD and then arrange a withdrawal from the institution you want to take it from. Don't let the custodian make the computation for you. There is no requirement to formally notify each custodian of the withdrawal from the other. The only problem is sometimes convincing a custodian NOT to make a withdrawal. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

The custodian has NO responsibility to inform the IRA owner. Rules permit the IRA owner to take required distributions from any IRA account, so a custodian cannot know if they have to make a distribution or not. The taxpayer pays the penalty on form 5329. After paying, the taxpayer can request a waiver and refund of said penalty. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

They should NOT be recalculated. I make it very clear to clients that once we start the program, no additional money should go into (or out of, obviously) this IRA. I HATE these questions, and try to avoid them! ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

While the tax law says that a recharacterization cannot be rescinded, the regs suggest that in this situation you can recharacterize back to a traditional IRA since you are not eligible for the Roth. I suggest you get an extension of time to file so that you can get this properly worked out. ------------------ Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com

You can't. Your options were to pay it one year or over four years. No other options. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

The phase out range for single is between $95,000 and $110,000. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Loxielady, Since your daughter's earned income exceeds the exclusion, she has earned income that qualifies her to make a roth contribution, PROVIDED that her total income IGNORING THE EXCLUSION is not over the limit. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Waterhouse is right. It's scary that accountants may be giving wrong advice on this issue. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

You need not fill anything out for a contribution to a roth. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Conversion income does NOT count towards the income limitation. Makes me wonder what other mistakes are being made on your return. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

A recharacterization must include the applicable income. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Christine, Only cash can be contributed. No land, no stock, no contractual rights, nothing but cash. To put it another way, if you want to contribute to any type of IRA, SHOW THEM THE MONEY! ------------------ Barry Picker, CPA/PFS, CFP New York, NY

[[barry, perhaps you can add some commentary what a lay person can do or questions to ask to ascertain the skills and experience of professionals. Is retirement accounting/law a posted specialty? ]] It's not a posted specialty. I added a section on this question in my guide, "IRAs at 70½". What I will do is excerpt it into an article that I will post on my web site, and come back and put a link in, if no one objects. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

April 1st of the year after the year you attain age 70½. If the April 1st comes out on a Saturday or Sunday, like it does this year, you have until the next business day (April 3rd this year). ------------------ Barry Picker, CPA/PFS, CFP New York, NY

[[iRAland the rule should be "consult your accountant or tax preparer before taking action"]] Unfortunately most accountants and tax preparers are not well versed in the IRA rules, so you have to check around to find someone that is. Just remember the dollars you're dealing with, compounded over time. Make sure the accountant knows what he/she is talking about, be very leery of what the custodian says, and for pete's sake ignore what your neighbor tells you her cousin's accountant told her! ------------------ Barry Picker, CPA/PFS, CFP New York, NY

From memory, check in code sec 408(d) or the regs under that section. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

John G has editted his answer. Recheck it and see if you're still confused. ------------------ Barry Picker, CPA/PFS, CFP New York, NY