masteff

My opinion is Sieve gets the gold star for the most complete answer (and I concur w/ him fully).

I concur. Once had a small plan that was the exact same way.

Instructions for line 13 say: "Do not include salaries and wages deductible elsewhere on the return, such as amounts included in officers’ compensation, cost of goods sold, elective contributions to a section 401(k) cash or deferred arrangement or amounts contributed under a salary reduction SEP agreement or a SIMPLE IRA plan." So my answer is line 23.

Keep in mind that after, I think, either 6 months or a year, the employer's "notice" that a QDRO is being pursued goes stale and they quit having to restrict the account and such. They have no way to know that you didn't settle outside the plan.

I agree, prospective change applying to "the Plan Year for which this notice is being provided".

The reg Q&A-9 says "The level amortization requirement of section 72(p)(2)© does not apply for a period, not longer than one year". The amortization requirement goes w/ the loan repayments, not w/ the leave of absence. So at whatever point during the leave you start to apply the waiver under Q&A-9, you then run it for lesser of 12 months or return to work. For example, a person continues making payments for 6 months of their leave and the requests to stop payments, you'd start the 12 months from that point and not the start of the leave.

In an earlier life of that joke, it was "Dear Walter" and the husband was a cross dresser: http://www.consumertraveler.com/forum/showthread.php?t=17478

I agree. Reg 1.401(a)(9)-5 Q&A-9

Sounds like the flunky at the provider doesn't really understand the regs (or their own document). So for this example, the first MRD can/must be taken anytime between Jan 16, 2010 (day after retirement) and April 1, 2011 (his RBD).

The real risk to me is having to remember in the 3rd or 4th year to make the change. The penalty of messing up and getting hit w/ the full taxable income burden in the 5th year is sooooo high. You know the IRA company will most likely screw it up so better to not set it up for failure. Unless you just know the person wants to avoid taking distributions as much as possible then I'd probably point her to your #2 option (IRA and uniform life starting next year).

you let us make things all murky in that other thread so you're just 2nd guessing the answer you know... The new code section from WRERA says: ‘‘(ii) SPECIAL RULES REGARDING WAIVER PERIOD.— For purposes of this paragraph— ‘‘(I) the required beginning date with respect to any individual shall be determined without regard to this subparagraph for purposes of applying this paragraph for calendar years after 2009, ...’’ So any way you cut it, the participant's RBD is 4/1/10 but died prior to that, so I agree w/ your a) answer.

You may run into a problem w/ reg Q&A-8. See the recent discussion here first: http://benefitslink.com/boards/index.php?showtopic=47022 Your situation differs because of the extra loan proceeds. That said, look at the part of Q&A-20 that says "This paragraph (a)(2) does not apply to a replacement loan if the terms of the replacement loan would satisfy section 72(p)(2) and this section determined as if the replacement loan consisted of two separate loans". Which in simplistic terms is to say, if the remainder of the original loan is paid off w/in its original terms and the "new" part of the loan is paid off w/in 5 years, then you should be okay. I'd point them to that and make them explain why they still think it's not allowed.

Okay, I retract that... Step 1, rollover from inherited QP account to inherited IRA. See MJB's comments supporting that rollover is permitted prior to year 5. Step 2, invoke Reg 1.408-8 Q&A-5 to treat inherited IRA as own IRA. Q&A-5 says two important things. #1 - That 401(a)(9)(A) now applies, thus breaking linkage to the 5-year rule. #2 - That #1 applies for the year of the election... so it's like going back to January 1st and magically becoming the owner and so any distribution during the year or after is under 401(a)(9)(A) and not under the 5-year rule. This is the ultimate QP stretch plan (for an older spouse). But only if done prior to year 5 because in year 5 it's not a rollover, it's the final distribution of the full balance. Question: would you make a spouse who's past their RBD take an MRD (from the IRA that's now treated as their own) for that year (based on them being the owner and not a beneficiary), just to be safe since the election applies for the year and Reg 1.401(a)(9)-7 Q&A-2 would suggest you add the rollover to the balance of the IRA?

Okay guys, here's the loop hole (in my opinion).... it's the whole election to "treat as the spouse's own IRA" election. From Reg 1.408-8 Q&A-5 (emphasis added): (a) The surviving spouse of an individual may elect, in the manner described in paragraph (b) of this A-5, to treat the spouse's entire interest as a beneficiary in an individual's IRA (or the remaining part of such interest if distribution thereof has commenced to the spouse) as the spouse's own IRA. This election is permitted to be made at any time after the individual's date of death. In order to make this election, the spouse must be the sole beneficiary of the IRA and have an unlimited right to withdraw amounts from the IRA. If a trust is named as beneficiary of the IRA, this requirement is not satisfied even if the spouse is the sole beneficiary of the trust. If the surviving spouse makes the election, the required minimum distribution for the calendar year of the election and each subsequent calendar year is determined under section 401(a)(9)(A) with the spouse as IRA owner and not section 401(a)(9)(B) with the surviving spouse as the deceased IRA owner's beneficiary. However, if the election is made in the calendar year containing the IRA owner's death, the spouse is not required to take a required minimum distribution as the IRA owner for that calendar year. Instead, the spouse is required to take a required minimum distribution for that year, determined with respect to the deceased IRA owner under the rules of A-4(a) of Sec. 1.401(a)(9)-5, to the extent such a distribution was not made to the IRA owner before death. So, I see it as the election counts as a reset button switching the MRD from 401(a)(9)(B) to 401(a)(9)(A), thus making the 5-year rule magically go "poof". Edit: of course one should probably then argue that the distribution of the full amount in year 4 is an MRD and thus ineligible for rollover. Edit 2: @MJB - I also note the PLR you cited explicity notes the Final 1.401(a)(9) regs of 2002 allow the use of the 1987 Proposed regs for purposes of that PLR issued in 2002, so subsequent years have to look to the newer 2002 regs which may alter the outcome.

I thought 70 1/2 trumped 5-year method.

For an external source of confirmation: "Remember also that you may contribute to a Roth IRA even if you are covered by a company retirement (pension/401(k)/profit sharing) plan." http://www.fool.com/money/allaboutiras/allaboutiras04.htm

At risk of repeating myself: This also conforms to other places in the Regs and Pub 590 that says a surviving spouse can elect at anytime to make the IRA their own (ie, not restricted to year of death or such).

The "regular" Uniform Life table originated when the Service released the new 401(a)(9) regs in 2001/2002. Since the regs changed the date of determining the beneficiary from the RBD to after death of the participant, they provided the automatic presumption of a spouse 10 years younger; this reduced a lot of administrative burden of looking up J&S factors; it also removed disparity where Person A's spouse was a year or two younger than Person B's. See page 7 of T.D. 8987 here: http://www.unclefed.com/ForTaxProfs/irs-regs/2002/td8987.pdf

The "regular (Uniform Life) table" is merely a special joint table with the survivor being 10 years younger. You'd get the same answer by looking at the joint table for ages 85 & 75. My understanding is she could take her 2010 MRD (using the single life table), then rollover to an IRA and "make it her own" and next year be able to use the "regular table". But if she merely rolled over w/out "making it her own IRA" then she'd still use the single life table.

Not sure what you mean by a general rule. IRS Publication 590 has some helpful information. What might be tripping you up is that contributions to a Traditional IRA may have limited deduction if also in an employer plan. But since Roth contribuitons are not deductible, then only income phase out matters. The fact that the EE in question stopped making Roth contribs when started in the 401(k) suggests to me that the person only has X dollars of cashflow to allocate to retirement and since the 401(k) likely has a match then the person is going that route instead of Roth.

1) Yes. See IRS Publication 575 page 26. (And after-tax money can be directly rolled over to another qualified plan or to a traditional or Roth IRA.) 2) The plan docs will hopefully tell you. It might have a source heirarchy or it might say pro-rata. The heirarchy can be different depending on the type of withdrawal (eg a loan, a partial lump sum, a periodic, etc).

It's currently the 2nd item in the "Newsroom" on the IRS site. Here's the actual item on the IRS site: http://www.irs.gov/newsroom/article/0,,id=229975,00.html

At first I was going to disagree w/ Belgrath based on Q&A-8, however closer reading of Q&A-20 makes me of the opinion that since loan #1 was already qualified for the principal residence loan exception then the replacement loan doesn't have to requalify for the exception. Q&A-8's "cannot qualify" implies to me a new qualification (eg, a non-residence loan into residence loan) as opposed to the continuation of existing qualification.

The IRS website now has a page on this topic. http://www.irs.gov/retirement/article/0,,id=228390,00.html

Here's your answer (had to randomly click to finally find it)... http://www.choosingaretirementsolution.org...lans_Types.aspx Note: Defined Benefit Plans are not included in the Choose a Plan Section. The gathering of information necessary to help you determine the appropriateness of this plan for your business falls outside the scope of this site. We encourage you, however, to discuss with your accountant or other financial advisor whether a defined benefit plan would be a good option for your employees. To learn more about defined benefit plans please visit http://www.dol.gov/elaws/pwbaplan.htm. Edit: as a CPA, I'm sorely disappointed by them. And the Resources page completely sucks.