Appleby

How about charging a legitimate fee of $2.01, then you won’t need to report the $9.99 balance. I don't think you can report withdrawals to the beneficiary if they occurred after the beneficiary's death

Yes. You are eligible to convert, providing your tax filing status is not married filing separately . Lack of taxable income will not cause your conversion to 'fail'

...If the beneficiary is not a US citizen or a resident alien

Technical Information Release 04-23

Just to add to the other posts/responses Yes- as indicated in the other responses This trasnaction you refer to ( moving the assets from the 401(k) to the Traditional IRA then to the Roth IRA is referred to as a Roth Conversion . The income limit for this a a MAGI of $100,000. There is no dollar limit as to the amount you can move, therefore if your MAGI for the year you do this is $100,000 or less, it would be OK...

VA does .

I have always understood from all the books I have read on the topic, that the beneficiary may aggregate RMD for inherited IRAs from the same decedent...But a poster at another forum indicated that one financial institution has indicated that the aggregation rule does not apply if the IRA owner dies on or after the RBD. §1.408-8 Q&A 9 seems to suggest that this is correct, as it states in part “…However, amounts in IRAs that an individual holds as a beneficiary of the same decedent and which are being distributed under the life expectancy rule in section 401(a)(9)(B)(iii) or (iv) may be aggregated, but such amounts may not be aggregated with amounts held in IRAs that the individual holds as the IRA owner or as the beneficiary of another decedent.” The question then becomes, “ why does it appear that aggregation is limited to 401(a)(9)(B)(iii) or (iv), which applies to the life expectancy option when the participant died before the RBD? And does not appear to include 401(a)(9)(B)(i) which applies to when the participant died on or after the RBD?” Am I missing something?

For helpful definitions, See IRS publication 575- page 3 of the 2004 version. http://www.irs.gov/pub/irs-pdf/p575.pdf No Generally, if you can make ad-hoc distributions, then it is "on demand”…unlike an annuity contract , where a stream of payments are pre-determined . Eligible distributions from a 401(k) or profit sharing plan would generally be considered ‘on-demand’ payments- IMO

From what I recall, the PLR’s I have seen that addresses this topic allowed the amount to be credited to the account that was involved in the lawsuit. For instance, the credit would be allowed to the IRA, if the IRA was involved in the lawsuit…see 200452052 for instance... Agreed...also, bear in mind that if the amount is credited to the IRA as a rollover, a Form 5498 will be issued for the amount. This begs the question ( from the IRS and other interested parties), from whence did the rollover come?…as a Form 5498 is usually offset by a Form 1099-R. If the amount is rolled directly to the IRA before being credited to the ESOP, no 1099-R would have been issued for the amount, Additionally, if the check was made payable to the ESOP, it cannot be deposited to the IRA

Got an e-mail that the link does not work. It seems to be working now, but just in case, here is Bruce's post

See Bruce Steiner's comment at the following URL http://benefitslink.com/boards/index.php?s...st=0entry8369

In some states, divorce automatically revokes a beneficiary designation, where the former spouse was the designated beneficiary. I think CA and Illinois are two such states. …anyone know the rules for Pennsylvania?

Distributions from inherited/beneficiary IRAs by non-spouse beneficiaries are always free from the 10 percent additional tax (AKA early distribution penalty)

Austin, from a general perspective, you are right…but even though the individual-k is just a 401(k) plan, we must consider the target market, and the way the product was designed for that market segment-as Jerome indicated. An employer with non-owner employees who are eligible to participate in the 401(k) plan –technically-would not be eligible for the individual-k plan, because the premise of the individual-k plan is that no ADP, ACP, Top heavy testing is required because the plan covers only owner-employees. Under the individual-k plan, employer contributions are usually immediately 100 percent vested and participants usually become eligible for profit sharing contributions after only 1 year of service or less. As such the adoption agreement for the individual-k plan is void of (or have limited) options where an employer would usually make testing, eligibility other elections… An employer who has non-owner employees that are eligible to participate in the plan would usually complete a more complex/detailed adoption agreement, where he/she can make ADP, ACP and top heavy testing elections that would apply to the plan as well as stricter eligibility requirements, vesting schedules etc. In most cases, the individual-k adoption agreement is a 2-3 page document, whereas the regular 401(k) adoption agreement is much more. It’s more design than regulatory. It’s the prototype sponsor saying unless you fit a narrowly defined mold, you are not eligible to use the individual-k plan. The regular 401(k) adoption agreement can be used for an employer where the plan covers only the business owner…but why complete a 20 page document, where a 3 page document would do the job? The financial institutions that offer the individual-k product flags them as such for various reasons, including allowing their staff (customer service department and such) to focus only on the rules that would apply to that plan when responding to related questions, as opposed to the numerous rules that applies to a regular 401(k) plan.

...the term “ conduit IRA” is sometimes used to mean “ Inherited/beneficiary IRA”. You may want to check to make sure of the context in which the term is being used. Non-spouse beneficiaries cannot rollover/converted inherited traditional IRA assets to a Roth IRA

A full recharacterization would be accomplished if you recharacterize both accounts that include the converted assets. I agree with John…to determine the exact amount you need to recharacterize, you need to perform a specific calculation to determine any earnings/loss on the amount being recharacterized. For instance, if you decide to recharacterize $25,000 of the $50,000 you converted, a calculation must be done to determine the value of the $25,000 at the time the recharacterization occurs. See the attached document ( TD 9056) for instructions on calculating the amount to be recharacterized . Not all custodians perform the calculation TD_9056.pdf

…and, if non-owner employees are eligible to participate in the plan for any year, the employer is not eligible to maintain the individual-k plan for that year…the plan would not be frozen, but would be amended to a regular 401(k) plan. This may be accomplished by completing a different set of documentation, where the appropriate elections, such as testing elections, eligibility requirements, vesting etc… are made

DGM…But that does not prevent him from amending the existing SEP to a Prototype SEP. If the mutual fund company offers a prototype, he could use their document to amend the existing SEP and ask them to reflect the amendment of their records. This allows him to keep the same investments, and maybe even the same account number. For some financial institutions, the amendment may include changing the account title or type to designate the plan as a prototype instead of the model SEP, for other’s is just simply having the documentation on file…

I am pretty sure that it is the partnership that must establish the plan and not individual partners - can’t put my hands on a cite right now A partnership would be eligible for the 5500-EZ ( assuming the plan covers only the business owners, which must happen in the case of the Individual (k) Plan)

33:Way Up North Where The Air Gets Cold (Little St. Nick) Yes. Someone gave me the answer

Yes. to both questions

23- Sleigh bells ringing are your listening..something something glistening

It depends. If the amount you withdraw is no more than the amount you converted, then your withdrawal will be tax and penalty-free. Any withdrawn amount in excess of the amount you converted will be subject to income tax and the 10-percent additional tax ( early distribution penalty)…the penaly is waived if you meet an exception... this is assuming that the conversion in 1998 is the only Roth IRA contribution/conversion you completed to date. If not, that may change the response.

Beneficiary form rules. IRA is not considered part of his estate.

You are right. The excess amount is an ineligible rollover and must be removed from the IRA as a ‘return of excess contribution”. The IRA owner should notify the IRA custodian regarding the appropriate that the IRA owner must complete to have the amount removed from the IRA. The IRA owner may then return the funds to the plan