Appleby

This may be due to a processing error. Why not just call them up, and tell them you may have been charged twice?

Withholding on IRA distributions are optional. If the client wants to have no taxes withheld, then he/she must make that election on the distribution request . If no election is made, the payer is required to withheld 10%.

LOL…your meanderings are LOL-funny

You are right David. What I should have said is…in general, where federal tax is not withheld, State tax withholding is not ‘required’.

So the participant can waive withholding on amounts up to the RMD amount for the year. Any amount in excess of the RMD will be subject to the mandatory 20% w/h, unless the amount is processed as a direct rollover. For state tax withholding, the rule vary by state. But in general, where federal tax is not withheld, State withholding does not apply.

Sounds right to me

...unless it's done on or after 01/01/08 , then you may do a direct Roth Conversion from your 401(k) plan to your Roth IRA. Talk to your Roth IRA custodian about their operational and documentation requirements

Capital gains treatment does not apply to assets held in IRAs. If you convert your traditional IRA assets to a Roth IRA, you will owe ordinary income tax on the taxable amount of your traditional IRA assets. If your traditional IRA does not include any nondeductible contributions, or rollover of after-tax amounts, then the entire converted amount would be subject to ordinary income tax. I am not an expert on investment strategies so I can’t say much on that. I do know that you can convert the assets in kind if you wish to. The decision of whether to liquidate the assets is usually determined by whether you think the stocks are still good to hold, or if you think it’s time to get rid of them and choose other investments . You may want to search for post from John G on investments for some help in that area.

It depends on what you eventually do with the contribution. See the instructions for IRS Form 8606 at http://www.irs.gov/pub/irs-pdf/i8606.pdf. page 3 applies to recharacterizations Publication 590 is also a good source on if and what forms you would need to file

You can have your investment company move the contribution from your Roth IRA to your Traditional IRA. But there are only two ways to do this, if you want it to be done correctly, and without any penalties being assessed. 1) As a recharacterization, Or 2) as a return of excess (distribution) and redeposit the amount to your traditional IRA as a contribution. For a return of excess, you still need to calculate the NIA and remove it from the Roth IRA, just as you need to do with the recharacterization. However, unlike the recharacterization, the NIA is not carried over to the traditional IRA. Since you want to move the “principal and dividends” along with the contribution , then you would need to move the contribution VIA a recharacterization The fact that this is an after-tax contribution has no bearing on how it is required to be corrected See IRS publication 590 at www.irs.gov

If you want to move the amount to your traditional IRA, you may do so VIA a recharacterization. The recharacterization must include any applicable NIA to the contribution. Your IRA custodian may require that you complete some paperwork; some will take the instructions over the telephone. It’s best to check with your custodian to determine what they need in order to process the transaction. If your custodian does not calculate the NIA, you may refer to TD 9056 for instructions on how to determine the amount You have up to the tax filing due date of your tax return plus extensions, to process the recharacterization. Click here for more

YW Yes. If she rolls over the amount to her ‘own’ IRA or other eligible retirement plan, then the uniform table applies …unless she remarries and her new spouse is more than ten years her junior- then she would be eligible to use the joint tables.

Yes. For the year of death, the RMD is calculated as if the participant is still alive. This matters only if the participant had not satisfied his RMD prior to dying. If the participant died on or after the RBD, then the assets are distributed over the longer of (a) the remaining life expectancy of the decedent or (b) the life expectancy of the beneficiary. Since she has a longer life expectancy, distributions would be determined using her life expectancy Subtracting 1 each year would apply only if the decedent’s remaining life expectancy was being used. Since she is the surviving spouse , her life expectancy is recalculated Only if she rolled over the amount to her 'own' retirement account . Only the single life table can be used if the assets remain in the plan

All I could find was something on plans with QJSA or QPSA. But I think the interpretation also applies to plans not subject to QJSA or QPSA. According to IRC §401(a)(11)(B)(iii) & Treas. Reg. §1.401(a)-20, Q&A-24(d), the loan is not included in the amount paid to the beneficiary.

The salary deferral to the 457(b) plan does not affect the salary deferral to the 401(k) plan and Vice versa. Therefore, if you are eligible to contribute to both plans, you can defer up to $15,500 to your 401(k) plan, plus an additional $15,500 to the 457(b) plan

Some are behind in their rollout, due to programming changes required to supporting systems

Bird, Take a look at Notice 2007-7

FWIW, I don't think it sounds that way at all...

The PLR addresses the issue of whether the surviving spouse needs to take an RMD amount , before rolling over the inherited plan balance…if the rollover occurs in the year the decedent would have reached age 70 ½, but before the end of the year. As far as whether Wilma can rollover Fred’s balance to her own account under the plan, see For distributions that occurred pre-EGTRRA, the spouse could rollover these amounts only to a traditional IRA, as ‘eligible retirement plans’ were limited to traditional IRAs for that purpose. EGTRRA §641(d) expanded the definition of eligible retirement plan for this purpose, to include all other plans that are included in the general definition of eligible retirement plan. Remember that this was part of the expanded portability under EGTRRA Plans are not required to accept these, or any other rollovers. Maybe your plan is designed not to accept these rollovers? It the plan permits such rollvers, then that would be consistent with the providions of the Tax Code

Are you saying she cannot rollover the inherited amount to her own account? Regarding the other issue...I know PLRs cannot be relied on, but I still want to refer to 200222033. Take a look at request ruling # 1 and the IRS’ response. The IRS seems to think that the entire balance was rollover eligible, as none of it was considered an RMD. And they appear to hinge the determination on the 'end of the year'.

Bear in mind that this is not like an IRA, where you need to move the assets from one individuals account to the other person’s account. Under the plan, book-keeping can be sufficient. Since a 1099-R is issued to Wilma, all that needs to happen is that her FMV for her account is increased by the valued of the amount she inherited. Someone familiar with recordkeeping would be able to explain the process much better than I. Also, a spouse beneficiary can rollover inherited amounts to her 'own' retirement account as per EGTRRA. The plan may need to perform recordkeeping to show taht Wilma rolled over the amount to her own account.

Are you saying that if she rolls over any day between Jan 1 and Dec 30, there is no RMD for 2007, but if she rolls over on Dec 31 there is? I disagree. Distributions must begin in 2007, as I described. If she rolled over the entire amount some of it was ineligible. Bird: You got a cite for the statement that distributions from Fred's account must must be taken by Wilma in 2007. Under the RMD rules if an owner dies after reaching 70 1/2 but before April first of the next year, no MRD is required because death occurred before the required beginning date (IRS pub 590 P 31 col 2). Fred died in the year he reached 70 1/2 but before he was required to take MRD ( 4/1). Wilma's RMD for 06 is based on her account balance as of 12/31/05 which does not include Fred's account. Wilma's RMD for 07 is based on her account balance as of 12/31/06 which does not include Fred's account. Wilma's RMD for 08 is based on her account balance as of 12/31/07 which includes the rollover from Fred's account in 2007. mjb's position seems correct to me

I had my post open and had to take a call, so I did not see your post masteff. My response is to Bird's post

That’s what I first though…and you are probably applying the same logic that I did at first, which is if an RMD is due for the year, then any distribution taken as of January 1 of the year is attributed towards the RMD until the RMD is satisfied, and any amount up to the RMD amount is not rollover eligible. I have been going back and forth with myself as to how that plays into the Spouse beneficiary’s deadline to start post-death RMDs. The sticking point for me is §1.401(a)(9)-3-Q&A A-6 and A-3 (b), and how they play into this? Isn't the emphasis on “ the end” of the year.

Masteff, This would be her post-death RMD, not Fred’s RMD. Since Fred died before his RBD, then he has no RMD. Notwithstanding, if Wilma rollover over the amount before December 31, she has no RMD for 2007 for the amount she inherited from Fred.,