Appleby

LOL

Yes. Revenue Ruling (Rev. Rul.) 2004-12 includes the following

I agree that you should accept the Participant’s ‘word for it’. But if you wanted to check, one way would be to review the laws of State B to determine their definition of ‘resident’ for tax purposes The thread at http://benefitslink.com/boards/index.php?s...ic=19541&hl may help

I don’t have it. But my opinion is that by being an ASPPA designation, it automatically receives recognition and is held in higher regard than most others – including some that have been available longer .

Sad! My condolences to his family and others who knew and loved him.

Good question. Passing the contribution information from one financial institution to another is not really a requirement for IRAs…but, each financial institution is required to retain documentation and records for a certain number of years after the IRA is closed. In most cases, the minimum period id five years.

Actually- I did not say the distributions are qualified. But I can see how it can be confusing. The link provided a definition to a qualified distribution, in response to your question “what is a qualified withdrawal”. However, in your scenarios, the distribution is not qualified, because you have not held a Roth IRA for at least five years. So, the question then becomes “ How is a non-qualified distribution treated?”. But before we answer that, let’s look at your question, which is “ If you convert money, and withdraw from that converted amount before five years, what are the tax implications for the examples you provided?”. The answer is: ----If you withdraw up to $10,000 to purchase a first time home, the amount is penalty free. ----If you withdraw any amount for qualified educational expenses, the amount is penalty free. The amounts will always be tax-free, because you already paid any taxed owed on the amount when it was converted. Now, let’s look at the broader issue of “ How is a non-qualified Roth IRA distribution treated?”. The answer depends on the source of the withdrawal. According to the ordering rules, withdrawals from Roth IRAs occur from the following sources: Regular contributions. When those are completely withdrawn, Conversion amounts. When those are completely withdrawn, Earnings ----Withdrawals from earnings are always tax and penalty –free, because they are from funds that were already taxed when contributed to the Roth IRA ----Withdrawals from conversion amounts are tax-free, because any taxes owed on those amounts were paid when converted . If the converted amount has been aged for less than five years, the withdrawal is subject to a 10% early distribution penalty, unless an exception applies. If the conversion amount has aged for at least five years, the 10% penalty does not apply. ----Withdrawals from earnings are subject to income tax and the 10% penalty. However, the penalty is waived if an exception applies. I hope that helps. Please feel free to post any follow-up questions

To add... If the SEP is a 5305-SEP, then the Participant is usually permitted to establish their SEP-IRA at any financial institution. The financial institution often requires a copy of the 5305-SEP form that was completed by the Employer, so that they can flag the IRA as a SEP-IRA. If the SEP is a Prototype SEP, it may include restrictions to the effect that all participant’s under the SEP must establish and maintain their SEP IRAs with the Prototype sponsor. This does not preclude the participant from transferring the balance to another IRA after the contributions have been made to the account. Even if there are no noted restrictions in the Prototype SEP Form to prevent the participant from establishing their SEP-IRA elsewhere, some financial institutions are unwilling to establish a SEP under another sponsor’s prototype , because of limitations or requirements that may be included- and to which they do not want to be subjected. For instance, a prototype-SEP may require the financial institution to calculate earnings on excess contributions. Not all financial institutions provide such calculations

Definition of a qualified distribution from a Roth IRA can be found here http://www.retirementdictionary.com/qualif...bution-roth.htm For your specific questions: 1. No penalty, up to $10,000 2. No penalty for qualified education expenses Qualified education expenses defined in IRS Publication 970 Hope this helps

Most payors incorporate the required language into their distribution/withdrawal request forms in order to satisfy the Form W4-P notice requirements. But whether separate or incorporated, it must be provided. I recall there may be some penalty for failing to provide the withholding notice.

Just an FYI that the threshold has been increased to $250,000 under PPA

Sounds reasonable to me as well. I think we need to have some pointed questions answered in order to even begin to determine which corrective measures would apply- if any: For instance: As Belgarath indicated- was the employee provided with the notification (for any of the three years) that she had an opportunity to enter into a salary reduction agreement? If so, did she make any salary deferral contributions? If she received the notification and she choose not to make the salary deferral contribution, then no corrections are required as she would not be entitled to a matching contribution. It seems apparent that it is not the case- but as I have leaned from experience, it is never safe to assume. Was the matching contribution formula the one selected by the employer for all three years? There is also the issue of the penalty that would apply to the business owner- and possible the financial institution- if the proper notification was not provided to the participant---$50 for each day the failure continues. Many financial institutions do provide the notification to participants VIA mail- often as part of (or included in) their regular account statements. Participants often miss these notifications- as like many of us- they do not read their statements. In addition, the employer is also required to provide the 'Employer Contribution Notice' The first step would be to find out if the proper notification was provided, and if so, the contribution election ( matching or non-elective) chosen by the employer for the year. For matching contributions, it should also be determined whether the percentage was reduced to an amount not less than 3%.

So in other words, the taxpayer is not eligible for the age 55 exception because she separated from service before the year she reached age 55. The exception applies to taxpayers who separate from service in the year they reach age 55 or later and the distribution occurs after they separate from service

Seen this http://benefitslink.com/articles/washbull070716.html ?

Posts merged. Wonder if I should have? Now it looks like it was posted thrice in the same thread

just to add, the actual options available if she keeps it as 'inherited account' would be determined by the provisions of the plan document. Also, by plan, I assume you mean qualified plan? If not, please post...

Separate RMDs would be calculated. After she takes the RMD from the amount she inherited from him, she can either: Rollover the balance to her own IRA. RMD would be calculated using the uniform table, unless she marries someone more than ten years her junior which would allow her to use the joint table Rollover the balance to her 401(k) account. RMD would be calculated using the uniform table, unless she marries someone more than ten years her junior which would allow her to use the joint table Take death distributions from the decedent’s (now inherited account) balance. For her distribution options under this choice, see http://www.retirementdictionary.com/qr_benoptions.htm

And your Roth-k deferrals are reduced by your regular 403(b)/401(k) deferrals. I.e., your aggregate deferrals cannot exceed $15,500 + catch-up for 2007

http://richardweylman.com/MarketingTip/_Ma...ails.cfm?id=381 On July 4th, Americans everywhere celebrate our country’s independence. The National Anthem of the United States of America, written by Francis Scott Key, is a song that stirs strong emotions in us. Here is a description of the events that led to the writing of our nation’s great Anthem, taken from the words of noted writer Isaac Asimov: "In 1812, the United States went to war with Great Britain, primarily over freedom of the Seas. For two years, we held off the British and our seamen proved better… Great Britain turned its attention to the United States, launching a three-pronged attack. "The northern prong was to come down Lake Champlain toward New York and seize parts of New England. The southern prong was to go up the Mississippi, take New Orleans and paralyze the west. The central prong was to head for the Mid-Atlantic States and then attack Baltimore, the greatest port south of New York. … "On September 12, [the British] arrived and found 1,000 men in Fort McHenry. If the British wished to take Baltimore, they would have to take the fort. On one of the British ships was an aged physician, William Beanes, who had been arrested in Maryland and brought along as a prisoner. Francis Scott Key, a lawyer and friend, had come to the ship to negotiate his release. As twilight deepened, Key and Beans saw the American flag flying over Fort McHenry. But toward morning the bombardment ceased, and a dread silence fell. … "As dawn began to brighten the eastern sky, Key and Beanes stared out at the fort, trying to see which flag flew over it. After it was all finished, Key wrote a four stanza poem telling the events of that night called “The Defense of Fort McHenry” [and] for obvious reasons, Key’s work became known as “The Star Spangled Banner,” and in 1931, Congress declared it the official anthem of the United States. Presumably, the old doctor is speaking. This is what he asks Key: OH! SAY, CAN YOU SEE, BY THE DAWN’S EARLY LIGHT, WHAT SO PROUDLY WE HAILED AT THE TWILIGHT’S LAST GLEAMING? WHOSE BROAD STRIPES AND BRIGHT STARS, THROUGH THE PERILOUS FIGHT, O’ER THE RAMPARTS WE WATCHED WERE SO GALLANTLY STEAMING? AND THE ROCKET’S RED GLARE, THE BOMBS BURSTING IN AIR, GAVE PROOF THROUGH THE NIGHT THAT OUR FLAG WAS STILL THERE. OH! SAY, DOES THAT STAR-SPANGLED BANNER YET WAVE, O’ER THE LAND OF THE FREE AND THE HOME OF THE BRAVE? ON THE SHORE, DIMLY SEEN THROUGH THE MIST OF THE DEEP WHERE THE FOE’S HAUGHTY HOST IN DREAD SILENCE REPOSES, WHAT IS THAT WHICH THE BREZE, O’ER THE TOWERING STEEP, AS IT FITFULLY BLOWS, HALF CONCEALS, HALF DISCLOSES? NOW IT CATCHES THE GLEAM OF THE MORNING’S FIRST BEAM, IN FULL GLORY REFLECTED, NOW SHINES ON THE STREAM ‘TIS THE STAR-SPANGLED BANNER. OH! LONG MAY IT WAVE O’ER THE LAND OF THE FREE AND THE HOME OF THE BRAVE! AND WHERE IS THAT BAND WHO SO VAUNTINGLY SWORE THAT THE HAVOC OF WAR AND THE BATTLE’S CONFUSION A HOME AND A COUNTRY SHOULD LEAVE US NO MORE? THEIR BLOOD HAS WASHED OUT THEIR FOUL FOOTSTEP’S POLLUTION. NO REFUGE COULD SAVE THE HIRELING AND SLAVE FROM THE TERROR OF FLIGHT, OR THE GLOOM OF THE GRAVE, AND THE STAR-SPANGLED BANNER IN TRIUMPH DOTH WAVE O’ER THE LAND OF THE FREE AND THE HOME OF THE BRAVE. OH! THUS BE IT EVER, WHEN FREEMEN SHALL STAND BETWEEN THEIR LOVED HOMES AND THE WAR’S DESOLATION, BLEST WITH VICTORY AND PEACE, MAY THE HEAVEN – RESCUED LAND PRAISE THE POWER THAT HATH MADE AND PRESERVED US A NATION. THEN CONQUER WE MUST, FOR OUR CAUSE IS JUST, AND THIS BE OUR MOTTO – “IN GOD IS OUR TRUST.” AND THE STAR-SPANGLED BANNER IN TRIUMPH DOTH WAVE O’ER THE LAND OF THE FREE AND THE HOME OF THE BRAVE."

...and then they were to be no more.....Schedule Ps that is http://www.irs.gov/pub/irs-drop/a-07-63.pdf

I agree, as the offset is really a true distribution...unlike a deemed distribution which is not ( a true distribution).

Hey Lori, The right figure is $106,341 because you use the uniform table. As you indicated, the joint table is used only if spouse is more than 10 years the junior of the owner

Great tips Dave. Thanks I think I will do the same for my E-Mail programs by setting up similar folders

I know I am in the majority when I say the BenefitsLink Newsletter is the best. Like many, I subscribe to many Newsletters that I think carries information that is or will be of interest to me. But I can never seem to find the time to read them all. And putting them in a ‘to be read’ folder does not work as I never get back to them. So, inevitably, steps must be taken to either: Unsubscribe Keep those that you know you must skim through- just in case Definitely keep the very few that you will read most, if not all of it Cypen & Cypen is one that I really enjoy skimming through, and often find something in it that I must read. For instance, look at today’s issue: Light------ a little bit of funny------a little bit of commentary ----good intro to topical issues ... I also like PlanSponsor's Newsdash and CCH Would you care to list your favorites? It’s time to shake up my list, and I need some good ones to replace those from which I will be unsubscribing.

We were waiting for you to respond Jim I agree too Cite Treas Reg §1.401(a)-20, Q&A-24(d)