Appleby

Something was done for Hurricane Katrina victims. I don't recall any other provisions

Hi Tom, I sent you an e-mail just now. If you did not receive it, please let me know ( not related to this post). Denise

The withholding is voluntary, i.e. the participant can elect to have zero withholding. However, if the participant elect to have withholding done, the withholding percentage must generally be at least 10%.

That is generally true MJB. But I think you will agree that this is an unusual case, and may be subject to different rules. For instance, the cite provided provides that the IRA would be treated as the receiving spouse’s ‘own’ IRA, which is not an option for these assets. I would be hesitant to honor the request to transfer the amount to the former spouse, unless the divorce decree states clearly that the parties are aware that the assets were inherited by the spouse giving up the assets, and he/she is electing to have the amount treated as marital property, despite whether state law provides otherwise. Whick would help to confirm that that all parties involved, including the judge signing the decree, and any attorneys , is aware of the exception that is usually provided for inherited property.

In the example (in the article you cited), the amount would be penalty free if withdrawn in 2005. The example appears to require a little modification to the wording to make that clear. Also, there are two five year periods, one used to determine if a distribution is qualified, and other to determine if taxable conversion amounts has aged five years. See the article at http://www.investopedia.com/articles/retir...t/03/030403.asp

Hmmm… I always understood that inherited property cannot be treated as marital property- which would mean that an inherited IRA is not subject to division under a divorce decree. If that’s so, the question would then become, can they agree to include the inherited IRA as part of the settlement on a voluntary basis? I guess so, but I am not certain If it is allowed, the account would have to be titled to include the name of the decedent ( to show origin)in the registration, and the name of the spouse receiving the assets, using his/her TIN to show who is responsible for including the amount in income. Additionally, for purposes of calculating the distributions, the life-expectancy of the actual beneficiary should be used.

But with a merger, when a MPPP is involved, wouldn't there be separate accounting requirements? Which would not apply if the MPPP was terminated?

I am self-employed now, so hopefully my ‘employer’ can afford to send me to the conference next year . I am so jealous of those of you who attend

Yes. The matching contribution must still be made, as the matching is based on amounts deferred and compensation. It is unfortunate, but it is those who will need the retirement fund the most, that find it most challenging to save for retirement. Maybe the employer could consider providing an explanation of the importance of saving for retirement, and include some financial projections on the effects of withdrawing the contributions this soon? They should consider also that if it has been less than 2 years since the first deposit was made to a SIMPLE IRA, and the individual is under age 59 ½ when the distribution occurs, the penalty could be up to 25%.

You are right. The Compensation cap does not apply to matching contributions for a SIMPLE IRA, thus allowing the individual in your example to rec a match cont of $9,000, providing the amount of deferral contribution is at least $9,000

If you properly adopted the SIMPLE and was required to make contributions- I am not sure your accountant is allowed to make that decision. Were any of these contributions salary deferral and/or employer non-elective/matching contributions? If so, and you adopted the SIMPLE and provided the required notifications, you may need to amend your tax-return and show the amounts as contributions to the SIMPLE. If not, then the contributions may be excess contributions, which if removed timely may not be subject to the early distribution penalty- except for any earnings. Can you provide us with responses to the questions in bold above, as well as some additional details? For instance, when were the amounts deposited to the SIMPLEs and for what tax year? Please let me know if if you ahev questions on the above. Denise

For the exemption from the prohibited transaction, allowed for certain investment advice, it says Does this notification applies only to those who chose the investment adviser option, or does it also apply to those who use the computer model . I think the latter, but the language seems to suggest otherwise

http://www.irs.gov/newsroom/article/0,,id=163616,00.html

Presuming the plans are sponsored by unrelated employers, you may contribute to both. With one exception, each plan's own limits are followed, without regard to what one does in the other plan. The one exception is the section 402(g) limit, the elective deferral limit. The limit is an individual limit based on the person's tax year, which will virtually always be the calendar year. In general, persons under age 50 will have a $15,000 maximum allowable contribution limit, when adding elective deferrals made to the two plans. …and individuals who are at least age 50 by year-end may defer an additional $5,000. ( $15,000 and $5,000 limits indexed as of 2007.

Qualified plan balances can be rolled to Roth IRAs, but only as a Direct Rollover effective for distributions that occur after December 31, 2007 ( PPA 2006)

See the article An Overview Of After-Tax Balance Rules at http://www1.investopedia.com/articles/reti...ertaxassets.asp for some related information. I hope you find it helpful

See http://benefitslink.com/boards/index.php?showtopic=28235

...I think becuuse he would not get the benefit of the charitable contribution...but, I agree that the option would be to first take the RMD and move the balance to the IRA as a direct rollover. That should be done this year., so that he will be eligible for the charitable contribution next year... He will not be eligible for the charitable contribution this year....

http://www.taxlinks.com/rulings/1980/revrul80-350.htm I love Google

At a very high level- yes...providing the beneficiary did not take any distributions from the account. Exzceptions apply to RMD amounts taken by the beneficiary Is it one designated beneficiary? Is the designated beneficiary an individual?

There is nothing wrong with transferring the excess Roth IRA contribution to your traditional IRA, providing your aggregate contribution (for both your traditional and Roth IRAs, ) do not exceed $4,000 ( $5,000 if you reach age 50 by year-end). This transfer is referred to as a recharacterization. For recharacterizations, the earnings must be recharacterized among with the contribution being recharacterized. The formula for determining these earnings is the same as the formula used to determine earnings on amounts removed as a ‘return of excess’ contribution. Bear in mind that your recharacterization can be done ‘in-kind’, which means you need not liquidate your mutual funds to complete the recharacterization. The formula is available in TD 9056 available at http://www.irs.gov/pub/irs-regs/td9056.pdf

John, Thanks very much. Denise

Someone asked me about waiver of customer identification procedures (CIP) for active members of the armed force. I have searched high and low and can’t find anything that provides a waiver of these (CIP) rules for these individuals. Are we aware of any? If you are involved in the account opening process at your firm, do you have special provisions for active members of the armed force? Denise

I though so- as I do know some individuals use ‘qualified’ to refer to all retirement assets, including IRAs. Technically, ‘qualified’ is used to refer to qualified plans, such as 401(k) plans- hence the response from Bird. Yes. The assets can be transferred to an inherited IRA that is registered in the name of the beneficiary, as ‘beneficiary of’ the decedent, and using the beneficiary’s SS#. For instance, John Brown B/O Mary Smith or Mary Smith (Decd), John Brown (Bene) It seems that the annuity owner died before the required beginning date, which means that the assets can be distributed over the five year period of over the single life expectancy of the beneficiary. Most IRA agreements default to the life expectancy option. The IRA agreement should be reviewed to determine if any restrictions apply- for instance- whether it allows only the five year option

I’m wondering, by ‘annuity’, do you mean IRAnnuity ? If so, then the assets can be transferred to an inherited IRAccount.