BPickerCPA

Part III does not apply. Fill out part II using the total of BOTH conversions on the conversion line,a nd the amount of the FIRST conversion on the recharacterization line. That should leave you with a net equal to the SECOND conversion.

You need to know the value of the first conversion and the second conversion. The first conversion is "canceled" by the recharacterization, leaving the second conversion as the taxable amount. Just be glad you didn't do a PARTIAL recharacterization. Then the paper work would be horrendous.

The issue isn't whether a trust can be named as a beneficiary of an IRA. Any yokel can do that. The trick is to get the trust to be a 'designated beneficiary' so that the trust beneficiaries life expectancies can be used in computing required distributions. That's where many people get screwed up (including lawyers). For that, there are a bunch of hoops to jump through.

Not only can you contribute each year's Roth IRA contribution to different funds, you don't even have to contribute each year's contribution to ONE fund. Subject to a particular fund's minimum deposit requirements, you can split the $2K amoung 2 or more funds. Any fund person telling you that you must contribute your '99 contribution to the same fund is either ignorant, or wants your money. Makes me wonder, in either event.

If you have other traditional IRA accounts your basis of $2K is apportioned over all the IRA balances. You CANNOT pick one account and say that this account represents the non deductible fund. So the 8606 is correct.

Sorry, Russ. It depends on your state.

I disagree that the financial institution will help you determine the income if you commingle the account. I would not trust them to do a required minimum distribution, which is a much simpler calculation than related income on a recharacterization. Go for the separate account. It's safer and simpler.

You can make the annual contribution to the same Roth account.

The company that GETS the conversion does not send you a 1099R. You get the 1099R from the company that held the traditional IRA.

The taxes are deemed to be a withdrawal. You would have 60 days to restore the money to an IRA. IF you are past the 60 days, then you CANNOT restore the money to the IRA, and you must pay tax and penalty on it.

A person past his required beginning date would have been taking minimum distributions based upon a single life expectancy. If that life expectancy was being recalculated, then the proceeds must be paid out by 12/31 of the year following the year of death. If the person was using the term certain method, then the withdrawals can continue over the number of years remaining in the actuarial life. If a disclaimer would result in the IRA proceeds vesting in the surviving spouse, the spouse can do a rollover into her own IRA. But make sure you check with an attorney as to who has to disclaim and how the diclaimer should be effected,

As I see it, you have two choices. 1. Recharacterization 2. Annulment Go with choice 1! If the Fidelity person told you that conversion prior to marriage would avoid the joint income limit, he was ignorant. It was known all along that the $100K limit was on a joint return, and that your filing status is based upon marital status as of the last day of the year.

You CANNOT convert the insurance to a Roth. The insurance program was probably a bad deal for you, but it may be too late now to get out. Were you informed that in order for the money you take out to be "tax free" you have to take it as loans, which means keeping the insurance policy in force? If you just cash out the policy, the gain is taxable.

The SIMPLE will not preclude the Roth. You can do both.

As far as the IRS is concerned, the conversion was not done on the other assets. There is no recourse on their end; if it wasn't done, it wasn't done. Whether you have recourse with the broker is another matter, which you would have to discuss with an attorney. ------------------

The spouse has TWO rollover options. One is to roll the plan proceeds into an IRA is HIS name, with survivor as beneficiary, the other is to roll it into HER own IRA. If she rolls it into HER own IRA, then it's HER IRA, and she will be penalized if she takes money prior to 59½. If the IRA is in decedent's name, and she takes a beneficiary distribution, no penalty. This is not an all or nothing proposition. You can arrange part one way and part the other.

Actually, naming your revocable trust as your IRA beneficiary is a bad move. Naming the individuals is a much better idea.

David, As a named bene, the son can take minimum distributions over his (the son's) life expectancy. He will pay income tax as he withdraws it. If he disclaims and it goes to the estate, you lose the ability to take it over the son's life AND you potentially get hit for the extremely high estate income tax rates. The estate gets to 39.6% VERY quickly. In truth, this is a very poor plan. No advantage, plenty of disadvantage. It sounds like someone thought the estate, being non taxable for estate tax purposes, would be not taxed on income either. WRONG!

You can recharacterize for any reason you choose. But recharacterization only gets the money back into a traditional IRA. To get it back into the Roth, you must then reconvert it, at the then current value. At this point, it now becomes a 1999 conversion, and you lose the 4 year spread.

If you contact me via email, I will try to assist you. You did not leave an email address. WeSixPicks@aol.com (this is NOT a solicitation, I am just trying to help. It is not my intention to break any board rules, and if I did, I apologize) [This message has been edited by BPickerCPA (edited January 04, 1999).]

DO NOT put this money back into a traditional IRA! You can definitely put this money into a Roth account. If the brokers are telling you no, they're ignorant. I already had this argument with people at Schwab, and they told me that they would agree to accept the deposit. Insist on going to supervisory personnel, until you get satisfaction.

The way it works is that each of you can put $2K into a Roth (assuming there is at least $4K of earned income on the joint return). There is NO $3K limit for married taxpayers. Don't know where you heard this one, it's a new one on me. And totally false.

If you make a $2K annual contribution in 1998, that $2K can come out at any time with no penalty. If you make a $50K conversion in 2002, you cannot take that money out penalty free until 2007, unless you qualify for an exception.

Where on TaxLogic does it say that? After five years and before age 59½, ONLY earnings are subject to 10% penalty.

The one per year rule applies to rollovers, not to trustee to trustee transfers. It also does not apply to IRA to Roth rollovers. So you can change trustees as often as you want, in a trustee to trustee transfer.