BPickerCPA

The limit is that you can only contribute the lesser of $2K or earned income to an IRA for any year. Assuming you earned more than $2K and wish to contribute $2K, you can contribute $2K to one IRA, or $1 to 2,000 IRAs, or any other combination. Then next year, you can either contribute to your existing IRAs, or start new ones. So there is no legal limit on how many accounts you can have.

Contributed amounts can be withdrawn at any time without penalty. Converted amounts will be subject to penalty if withdrawn within the first five years starting with the year of conversion, if you are under 59½. After the five years have elapsed, there is no penalty for withdrawing the converted amount.

NYS & NYC tax you on the federal income, with modifications. Since I do not recall ever seeing anything about this being a modification (which would require an action by the legislature), that means that NYS and NYC give you the same 4 year spread, assuming you use it for the fed.

No. You must treat all of your Roths the same. In the case of a husband and wife, one can elect one year while the other spreads the income. But each of your own accounts must be consistently treated.

You can, under the law, contribute to your conversion Roth iRA. The custodian may not permit it under their own rules, usually due to ignorance of the law changes. Many custodians that I have dealt with have updated their rules, but the clericals may not have read all their updates. Check again, going up the chain. My guess is that it is now permitted.

What you need to do is do a "recharacterization". You move the entire account into a traditional IRA in a trustee to trustee transfer, or within the same trustee. You can move the stock, and keep the appreciation in the IRA umbrella.

Only cash can be contributed to an IRA, roth or traditional (unless it's a rollover)

If an individual dies with money in his traditional IRA, it can not then be converted to a Roth. The question is if the individual has withdrawn the money from his traditional IRA and then dies, can the executor complete the rollover. I don't have a concrete answer on that one.

As long as you qualify for the deduction, and for the conversion, you can do it. It is a minor loophole.

Although no one at the 12/10 hearing spoke on the age 70½ question, there are at least two comment letters on file on this issue, one of which I wrote. The only suggestion I can make at this time, if you are optimistic of a change forthcoming, is to do the conversion, take the RMD in the beginning of '99, file for extensions, and be prepared to do a recharacterization if no change is made by 10/15/99. Alternatively, you can litigate.

If the question is whether you have treated your clients properly if they would be better off converting to a Roth, and you told them not to, I will not answer that. As to whether they can convert next year, "no harm no foul", the answer is a definite NO in many cases. Many clients will not be able to convert next year due to the income limitations. Also, converting this year and spreading the income over four years is not the same as converting 1/4 of the account over four years. Clients for whom converting is advantageous, are entitled to know that if they asked, and should do the conversion in '98 if eligible.

You have until the EXTENDED due date. That would be 4/15/99 if you file by the normal due date, but could be as late as 10/15/99 if you file for extensions.

The answer is yes, provided that the entire account is transferred, and the subtantially equal payments continue after conversion. What will happen is that the substantially equal payments eliminates the 10% penalty on withdrawal of converted amounts, but if the four year spread is utilized to report income, the withdrawals will cause acceleration of that reporting. Be careful, because if you blow the plan at any time prior to age 59½ OR five years, you pay penalty on ALL withdrawals previously taken.

When a Roth IRA account holder dies, the beneficiary must either start to take distributions in the year after death, computed based upon bene life expectancy, or must take the entire account by 12/31 of the year of the fifth anniversary of death.

The election is IRREVOCABLE.

You cannot do a conversion of a SIMPLE until the SIMPLE is two years old. Therefore no conversion is currently allowed. One will be allowed in the future.

Sure are!

If you got married in '98 and you are married as of 12/31/98, you cannot file as a single individual, you must file either married joint or married separate. If your JOINT income exceeds $100K, you cannot convert to a Roth. If you already did, you must do a recharacterization.

The answer is an IRA deduction will NOT reduce MAGI. Originally it did, but the technical corrections changed that. See Sec 408A.

If you have a loss carryforward available, that is utilized in computing taxable income. It's not a question of IRS objection. It's only a question of proper computation of the tax.

The limit is on reconversion (and even then there is no limit, just a limit on how many reconversions can lower the tax burden), not on recharacterizations. You can always recharacterize, up to the due date, with extensions, of the tax return. If you're over the limit, recharacterize.

The money has to be OUT of the traditional IRA by 12/31. It can go into the Roth later, provided you meet the 60 day rollover requirements. Most trustee to trustee transfers are effected where the money is out of the traditional and into the Roth simultaneously. If you submit the paper work to the broker, and they don't get to it until Jan, then you do NOT have a '98 conversion.

After tax money in a 401(k) is NOT eligible for a rollover into any type of IRA.

You can legally make it to the same account.

The answer is definitely YES to all of your questions.