BPickerCPA

He will not need to wait five years to access his conversion money. If he withdraws the conversion money and gets into income, he will be taxed if five years have not elapsed. But the original, converted money is accessible without tax or penalty immediately. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Michael's answer is correct, UNLESS you had other IRA accounts. If so, you have to compute the taxable amount of the conversion based upon ALL IRA balances, not just the balance of the converted account. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

I did it at Charles Schwab. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

What you have to do is amend the 1998 return to get back the tax paid. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

The confusing part is this -- IF the annuity is an IRA, then you cannot take the RMD and put it into a Roth. You must take the RMD out of the IRA, and keep it out of the IRA. IF the annuity is NOT an IRA, then you cannot put it INTO an IRA, unless it's a tax deferred annuity plan under code sec 403(B). If it is, then you still cannot take an RMD and put it into any type of IRA. You must take it and keep it. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

4/17/2000 is the deadline for 1999 Roth contributions, even if you have already filed. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

There is a formula which takes into account the entire value of the account. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Your message is confusing. 1. Only money that is in an IRA can be moved to a Roth IRA. 2. Required minimum distributions at age 70½ cannot be put into a roth IRA. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

The Monday through Friday ones are always the sharpest knives in the drawer either. You may want to move the accounts to another bank, that will let you combine them. IF you do, let the old bank know why you're moving. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

You don't have a problem. The 5498 will notify the IRS about what happened. IF not you'll write them a letter. Put the $901.13 on line 15a with $1.13 on line 15b. You owe 10% additional tax on the $1.13. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

To put it bluntly, they're full of crap. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

1. You can convert only a portion to spread the tax over a number of years. 2. You can have one roth for you and another for your wife. You each need to have your own. 3. Invest in equities if you'd like. 4. You cannot roll directly from a 401k to a roth. 5. You're welcome ------------------ Barry Picker, CPA/PFS, CFP New York, NY

You cannot roll over after tax money. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

There was no provision in '98 letting you take money out penalty free to pay income tax, and there is no provision for this year. Perhaps you met a different exception, like being over 59½. Otherwise, if you withdraw money now to pay taxes, you owe a penalty and you accelerate the reporting of the 4 year spread. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

I have never seen an IRA where the IRA holder could not accelerate distributions. So the only question here is whether "senior" can and will sign the necessary papers, and if not, can anyone sign them for him. But clearly, if spouse has a general POA, she should be able to withdraw his IRA money. And if it's used for his care, I don't think the beneficiary has any legal basis to complain. A beneficiary has no legal right, except to get what's left when the IRA holder dies. There is no requirement that there, in fact, be anything left. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

If you contribute to a Roth IRA now for 1999, your start date for purposes of determining when your Roth is more than five years old will start on 1/1/99. However, you also have a five year wait period for EACH conversion. So if you convert to a Roth in 2000, the five year wait period for this conversion will be 1/1/2000. If you do another conversion in 2003, that five year period will start on 1/1/2003. You should understand that in addition to the Roth being over five years old, you also have to be over 59½. Once you attain age 59½, you needn't worry about the five year period after conversions since the penalty won't apply anyway. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

No question. He has to roll over the actual property received. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Actually, since you don't report Roth contributions on your 1040 anyway, there is no need to file an amended return. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

John, You can move an IRA to another IRA in a trustee to trustee transfer. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Since you're talking "plan" I'm assuming it's NOT an IRA. So the answer is no. That is a big problem with many plans that mandate a shorter payout period than the law. Unfortunately there is nothing you can do about it. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

Yes. In fact, I'll even give you until April 17th. But only this year. ------------------ Barry Picker, CPA/PFS, CFP New York, NY

John, The divisor is reduced by one each year, so even if the account grows, you take out more each year. Example: If Sally was 79 when she took her first distribution, there would be a 10 year payout. Let's assume a 25% growth, and the account was worth $100K at the first valuation date. Sally takes her distribution on the last day of the year. Sally has to take 1/10 of $100K the first year, but the account is worth $125K when she takes the distribution. Now it's worth $115K ($125-$10K) when she values the account for the second distribution, which is now 1/9 of that account. When Sally is 86, three years left in the payout, she has to take 1/3, then 1/2, then the entire account, so that when she gets to her 90s, the IRA is gone. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY

A beneficiary is permitted to name a beneficiary, but the new beneficiary can only continue the same schedule as the original beneficiary. The only way Sally can still be taking distributions if she is in her 90's is if she was in her 80's when Mary died. And even then there can't be many years left. If Sally was younger than her 80's when Mary died, the IRA should have been paid out by now. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY

[[Guess I'm still stuck on the issue of whether or not a trustee to trustee transfer is even reported to the IRS.]] I had a similar type of discussion concerning 1099s the other day. Basically, there are rules when 1099s have to be filed. However they can be filed even if they are not required. For example, you need to file a 1099 for miscellaneous income over $600. However you don't violate any law if you file them for income under the threshhold. So even if it is not required to have a trustee to trustee transfer reported to the IRS, some custodians will still do it. No big deal. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY

John, Once the decedent becomes the decedent, then he/she is no longer the owner of the IRA and cannot get taxable distributions. Therefore the beneficiary, who is now actually the owner, needs to have his/her SSN on the account since any distributions will be taxable to him/her. Barry ------------------ Barry Picker, CPA/PFS, CFP New York, NY