Appleby

Belgarath- charitable? Never!! I say bring out the gloves . Just kidding - nuff respect. I place great value on your opinion and always look forward to your responses to posts on the site. I feel the same way about mbozek, even when he and I disagrees . Thanks for the reference- good reading. I sent an E-mail to one of the authors, asking him his opinion of the state law requirement. I will let you know if he responds. (E-Mail returned undeliverable - resent 09/15/04) In the meantime, see the court opinion at http://www.fpanet.org/journal/articles/199...p0599-art13.cfm Some of the quotes from this reference includes the following mbozek, estate of Lute, 19 Fsupp 2d 1047 wasalso referenced . Bailiwick? I had to look up that one .

You’re welcome AJ. See The instructions for filing Form 5498 and 1099-R at http://www.irs.gov/pub/irs-pdf/i1099r.pdf See Page 5 Beneficiaries. Here is states that the TIN of the beneficiary must be used. In most cases, the tax reporting is done under the TIN that appears on the account; therefore, the TIN should be that of the beneficiary’s See also Page 12 “Inherited IRAs” and “Fair market value.”. They talk about the beneficiary’s form- not the deceased’s form. Which means that the information on the form must be that of the beneficiary, except where it is noted that the name of the deceased must be included. If the advisor insists that the assets should be maintain in one inherited IRA for both beneficiaries, he/she they should be able to explain how they will meet these reporting requirements. Please let me know if you need additonal information

As far as I know, the requirement is that at least the minimum amount is distributed each year to avoid the excess accumulation penalty. There is no rule that prohibits the individual from distributing more than the minimum amount or penalizes the individual from distributing excess amounts – at least not anymore … Under the Treas Reg § 1.401(a)(9)-3, the election is irrevocable. IMHO, this just means that the individual cannot revoke the life expectancy option by changing the election to the five-year rule... more than the minimum can always be distributed

…which does not appear to be allowable under the current provision of the code, which, for rollover purposes, describes an eligible retirement plan as (i) an individual retirement account described in section 408(a), (ii) an individual retirement annuity described in section 408(b) (other than an endowment contract), (iii) a qualified trust, (iv) an annuity plan described in section 403(a), (v) an eligible deferred compensation plan described in section 457(b) which is maintained by an eligible employer described in section 457(e)(1)(A), and (vi) an annuity contract described in section 403(b).

mbozek, The cite you reference suggests that state law requirements must be met. Further, all the reputable references that I have looked at says the disclaimer must satisfy the requirements of IRC 2518 and applicable state law. These include: --The ERISA Outline Book by Sal Tripoli --Panel Pension Library books Your comments?

Yeah. Too bad! I couldn’t locate any reference to how the interest would be calculated. I assume the IRS would assess the interest and then send a notification to the taxpayer, informing him/her of the amount of interest due.

It appears to boil down to operational requirements of the financial institution. For instance, under the reporting requirements… 1) FMV/5498 reporting must be done for each beneficiary, showing the value of each beneficiary’s share of the inherited IRA assets. Form 1099-R must be issued for/to each beneficiary that receives a distribution of the assets. 2 ) The inherited IRA must be maintained in the name of the deceased and the beneficiary, using the TIN of the beneficiary. The question then becomes, “can the financial institution meet these reporting requirements if the assets are held in one account?" ... For the financial institutions that I am familiar with, their operational requirements necessitate separate accounts being established and maintained for each beneficiary. On the other hand, I understand that some financial institutions are able to maintain the assets in one account, but their systems are flexible enough to perform sub-accounting, which maintains the separating accounting of investments growth loss and tax reporting requirements. You may want to ask the advisor whether and how these reporting requirements will be met. Finally, you mentioned that “They know that the RMD will be based on the Single Life Expectancy of the oldest beneficiary”. I wonder why they would want to do that , when if the assets are put into separate accounts by 12/31 of the year following the year the IRA owner dies, each beneficiary is allowed to use his/her own life expectancy to calculate post-death distributions?

See the following URL http://benefitslink.com/boards/index.php?showtopic=19386&hl

Actually no (no Sox Fan or any other team fan). I was just showing support for you and your team. I am sports-unaware . I currently live in New Jersey. However, I am job searching in New Jersey, Maryland and Virginia. So, depending on where I get my next job, I may be relocating soon.

Go Sox!! I see you are also 403(b)/457 expert. Good thing. Except for contribution limits and portability, I know naught about 457 Plans. A belated welcome to the board to you by the way.

mbozek, I do recall something about state law determining that a court approval may be required if the disclaimant is a minor or incapacitated. Can’t put my hands on the reference at this precise moment. I will check for it later. In the meantime, see REVENUE RULE 90-110 which states in part

We send a bill to the participant, giving him/her the option to pay the fee out of pocket. If the fee is not paid by certain deadline, the fee is debited from(charged to) the account.

Our charge- annual custodian fee fora 403(b(7) account = $50. Other adhoc/per transaction fee may apply for distributions VIA fed fund wire & processing loan requests...

A qualified disclaimer as described under IRC 2518 and satisfies state requirements . Some financial institutions or plans may provide a form. In most cases, the disclaimer is provided in a free form letter.

$205,000 See http://www.irs.gov/pub/irs-news/ir-03-122.pdf

From the Internal Revenue Manual(IRM) ….other IRS references use the term build or rebuild, in place of construct or reconstruct. Link to IRM http://www.irs.gov/irm/part4/ch18s05.html

You may maintain as many Roth IRAs as you want, but it may not be practical when you take into consideration the fees that may apply to all the accounts, including commissions on trades that you may split between the accounts. Regardless of the number of IRAs that you maintain, you are still limited to an aggregate contribution of $3,000 for 2004, plus $500 catch-up contribution if you are at least age 50 by year-end.

There is a formula that you may use to determine your maximum contribution amount, when your MAGI falls in the phase-out range. See http://www.investopedia.com/university/ret...ra/rothira1.asp for instructions and examples

Agreed... If the exclusive plan rule is not satisfied due to a merger or acquisition, there is a transition period, beginning the year the acquisition/merger occurs and continuing into the next year. See IRS Notice 98-4 for exceptions to the exclusive plan rule for mergers, acquisitions and similar transactions, Q&A B2 which states See also the comment in the same Notice…

The financial institution must report the distribution , whether or not you later rollover the amount. The distribution must be reported on IRS Form 1099-R- no exceptions. You can always election to have no-withholding from an IRA distribution. This election is made on IRS form W-4P, which is incorporated in most- if not all, IRA distribution request form. If the amount is rolled over, then the rollover contribution is reported on IRS form 5498. If the rollover is made within 60-days and otherwise meet the rollover requirements ,the transaction is not taxable. Other requirements include: --For IRAs, the same assets that was distributed must be rolled over (for instance if you distribute cash you must rollover cash) --You must not have rolled over a distribution from the same distributing IRA within the last twelve months Regarding notifying the broker , an IRA distribution request form is sufficient to request the distribution and a rollover contribution form is sufficient to redeposit the amount. Be sure to include the amount in the designated rollover section of the form. An amount that is distributed from your IRA, that you later properly rollover is not taxable to you. The amount must be reported on your tax return. There is a designated area ( I think it’s line 15a and 15b of Form 1040), where you report the amount, and indicate that it is not taxable. This type of transaction (distribution from an IRA and rollover within 60-days) can be done once every twelve months per IRA. See this post for more information

As Barry Picker reminded me, it is even more practical to convert the second amount to a separate Roth IRA. This way, you can choose the Roth IRA that you want to recharacterize, and there is no need to bother with the complex calculation that is required to determine the earnings/loss on the amount being recharacterized. See Barry’s article at http://www.rothira.com/recharacter.htm TD 9056 is at http://www.irs.gov/pub/irs-regs/td9056.pdf

Under TD 9056, the final regulations for calculating earnings on excess contributions and contributions being recharacterized, it is provided that This suggests that you could elect to recharacterize the first contribution, if you feel it is worthwhile after taking John's comments into consideration.

QKAcked Up Another nominee

Update. The instructions have been changed to include SEPPs in Code 2...and mentions 72(q), (t), and (v) See http://www.irs.gov/formspubs/article/0,,id=109875,00.html

See also Rev Rul 2004-12 attached Rev_Rul_2004_12.pdf