Michael Devault

Assuming that the plan contains no provisions for common disasters, you might check state law. Some states have provisions for common disaster, requiring the beneficiary to survive the participant by a specified period of time, such as 30 days. If you're still at a "dead end," I agree that you should let the court decide. I'm interested in knowing how the matter is resolved. Good luck!

According to IRS Publication 590, there are no minimum age restrictions for taking distributions from an IRA. However, if they are taken prior to age 59-1/2, they are subject to a 10% premature distribution penalty unless one of the exceptions is met. One of these exceptions is a series of substantially equal periodic payments over the life expectancy of the taxpayer (or joint expectancies of the taxpayer and beneficiary). Thus, if a "life income" is taken, there is no minimum age at which it can begin, and it is not subject to the penalty. Hope this helps.

There are no minimum age requirements for establishing a series of substantially equal periodic payments. The IRS' life expectancy tables have expectancies as low as age 5! Lower ages will, of course, generate small income amounts. Perhaps the mutual fund company doesn't want to fool with small amounts of income paid over a long period of time? But, to say that these payments cannot be established is baloney! Good luck!

There is a catch-up that can be used in the year of separation from service which permits the exclusion allowance to be calculated using the 10 years of service ending on the date of separation. This catch up can replace the normal section 415 limit, and sometimes allows a larger contribution. There are two conditions, however. First, this catch up can be used ONLY if another 415 catch up hasn't been used in the past. It's quite common to see that the "any year" catch up has been used, making the employee ineligible for the separation from service limit. Second, the salary reduction contribution is limited to the elective deferral limit of $10,500, unless the employee is eligible for the special elective deferral catch up permitting a salary reduction contribution of as much as $13,500. Hope this helps.

I'm not sure if there's such a thing as a TARSEP. However, a long departed friend of mine used to promote this as a concept to sell non-qualifed annuities. He suggested that the owner of a small business pay himself/herself a bonus, which was then put into a deferred annuity. It cost the business owner only the tax on the bonus, but the entire bonus was the basis in the annuity for future distribution. He used it as a way to circumvent the requirement to make contributions to all eligible employees when that was of concern to the business owner. By the way, he said that TARSEP stood for Taxable And Reportable SEP. This probably doesn't help you too much, but I appreciate you causing me to remember my old friend.

David, I believe that the first distribution calender year is that in which the participant died. Therefore, the first distribution is to be made on or before April 1, 2000. The next distribution should be taken on or before December 31, 2000, and each year thereafter. Hope this helps.

Sandi, I'm not sure that there is a specific citation that addresses your question. However, I believe that it can be derived logically. Section 1.457-1(a)(3) establishes that it is the 457 deferral limit that is reduced by the contribution to the 403(B) plan. Therefore, in your example, the 457 limit of $8,000 is reduced to zero by the $8,000 contribution to the 403(B). Since the $2,000 contribution to the 457 plan exceeds the 457 limit of zero, it would seem logical that the excess contribution was made to the 457, so that plan must refund the excess. I'm curious to know if any other members have any experience in this matter or if they know of any specific ruling on the matter. Hope this is of some benefit to you.

I sure do. The instructions for Form 1099-R clearly state that transfers between trustees or issuers that involve no payment or distribution of funds to the participant are not to be reported. The exception to this statement is direct rollovers from qualified plans, which have special codes for Box 7 to indicate such. I suggest that you get the company that issued the 1099 to re-issue a corrected form. If that fails, show the distribution on form 1040 and a rollover of the same amount, netting zero as taxable. If the IRS questions it, make sure you keed accurate records of the transfer. Good luck!

You each have to open separate accounts. Hope this helps. Good luck!

Welcome to the U.S. Hope you enjoy your visit. I'm not sure that you would benefit from contributing to a Roth IRA. One of the advantages of a Roth IRA is that non-deductible contributions generally grow income tax free. If you are exempt from U.S. taxes, there seems to be no advantage to you to have a Roth IRA. Further, the ability to contribute to a Roth IRA is based on "compensation," as defined in the Internal Revenue Code. In this definition, compensation excludes amounts not included in income, such as foreign earned income. If your earnings are not included in taxable U.S. income, you couldn't make a contribution based on those earnings. Hope this is of some help to you.

As BZORC points out, your investment choices are identical to those available for traditional IRAs. And, his advice about going to a bank, brokerage company or insurance company is sound, since all of these institutions generally offer Roth IRAs. If you're interested in equities, keep in mind that a Roth IRA has to be in what's called a "custodial account." As such, the vendor (say a brokerage company) establishes an account that you participate in, but you are not the actual "owner" of the funds... the custodian controls the funds. If you want to move money from one fund to another within the same family of funds, you instruct the custodian to do so... you don't make the transfer yourself. Some brokerage firms have some restrictions on which funds can be used in a Roth or traditional IRA. You can get lots of material from some of their web sites. Hope this is of some benefit to you. Good luck!

The IRA can be set up for the minor ONLY if the minor has US income and pays US income taxes. The individual in your example can establish an IRA for themself and name the minor as beneficiary, if that will take care of the need.

Yes. Since you file a joint return, you can contribute $2,000 to an IRA or a Roth IRA (but not both) for your non-working spouse. This information, as well as other information about IRAs and Roth IRAs, can be found in IRS Publication 590. Hope this is of benefit to you. Good luck!

According to IRS Publication 590, compensation doesn't include "Any amounts you exclude from income, such as foreign earned income and housing costs." If you work for a US company overseas, they report your income on a W-2 and you pay US taxes on it, you should be able to use it for Roth IRA contribution purposes. Otherwise, you can't. Hope this helps.

If the $11,600 is in a pension plan, it can be rolled into a traditional IRA. Then, it can be converted to a Roth IRA, if you meet the IRS' criteria for doing so. However, under current law, the money in the 457 plan can't be rolled to an IRA; it can be rolled only to another 457 plan, which is not a likely option in your situation. It's probable that the law will change in the near future, allowing rollovers of 457 money, but it can't be done currently. I suggest that you discuss your situation with your accountant, stock broker, financial planner or insurance agent. They should be qualified to guide you thru the process. But, it you want to "go it alone," you might try some of the mutual fund web sites for info. Hope this if of some benefit to you. Good luck!

You can't make a direct rollover from a 401(k) to a Roth IRA. You have to roll it over into a traditional IRA. Then, if you meet the IRS' requirements for doing so, you can convert the traditional IRA to a Roth. Hope this helps.

I've always interpreted it to mean level amortization. The only variance would be if the payment schedule changed from quarterly to monthly, but in such an event, the payments would still be "substantially" equal. Hope this is of some help.

We've been involved in selling LTC for about a year now. From our experience, younger people are not too interested in Long Term Care benefits... they're more interested in saving (and spending) money. It's not until they reach their 50's where LTC seems to have any interest. If you have a fairly young group, LTC may not be appealing to them, in my opinion. (If there's any way you could get the information to their parents, however, you might have an opportunity.) Hope this is of some benefit to you.

Robman2, you can still open a Roth IRA for 1999. But, unless you reported it on the income tax you've already filed, you'll have to file an amended return.

Any amount distributed which is not a required distribution is an Eligible Rollover Distribution. So, they should be able to roll it into an IRA. I suggest that your client documents the transaction well, just in case the IRS questions the second distribution since it was coded as a required distribution. Good luck!

I believe she can. Look at IRS Form 8606. I think this is the form used to report recharacterizations. Hope this helps. Good luck!

Good question! I don't know if there is a definitive answer, but I would use March 31, just to be safe.

The penalty is imposed on the amount of the withdrawal. In your example, it would be imposed on the $10,000 withdrawn. Further, if the withdrawal occurs during the 2 year period following the date on which you first participated in the SIMPLE plan, the penalty is increased from 10% to 25%!

I think you've been given bad information. The instructions for completing 1099-R specifically state: "Do not use this code [G] for a distribution from an IRA." The instructions further state (on page 32) that "Generally, do not report transfers between trustees that involve no payment or distribution of funds to the participant..." You can get a copy of the instructions from the IRS' web site. I suggest you send the company a copy and ask them to send a corrected 1099-R Hope this helps. Good luck!

Your gut reaction is correct. Rev Proc 92-64 contains the IRS' model Rabbi trust. In section 4.03 of that Proc, the IRS says, "The trustee of the trust must be an independent third party that may be granted corporate trustee powers under state law, such as a bank trust department or other similar party." If you're going to use the model trust, the independent contractor can't be the trustee.