Appleby

Derelict, Gary, I agree the employer would not issue a 1099-R. But wouldn’t you agree that one should be issued by the Fund Company to report the return of excess? The excess amount + earnings in Box 1 and only earnings in Box 2a?

On the other hand… In [Gunter v United States, 537 F Supp 126 (WD Mi 1982)] , Gunther received a distribution which he intended to rollover within 60-days.He died before the rollover was completed. It was ruled that the representative of his estate was allowed to complete the rollover within the 60-day period. I think Gunther is more similar to your case WSM (I am assuming the assets were already distributed since you state within the 60-day period) In Gunther, the assets were already distributed. In PLR 200204038, even though the paperwork was completed, the assets were still in the delivering account.

In PLR 200204038, the IRS ruled that the rollover could not be completed after death 200419031 Barry- good job with PLR 200419031. Prior to it being issued, we always said rollover of 72(t) payments was not allowed (based on a verbal from the IRS to a 3rd party), even if the distributed amount prior to switching from amortization or annuitization - exceeds the new amount determined under the RMD rules.

You can make a spousal IRA contribution to your wife’s IRA. However, you must file a joint federal tax return. The total contribution to your IRA and your spouse’s IRA should not exceed your eligible compensation.

Right. And the TIN of the beneficiary must be used, so that all tax reporting for transactions that occur after the death of the IRA owner is reported under the TIN of the beneficiary

It’s too late. Once the assets are distributed to a non-spouse beneficiary, they cannot be returned to an IRA- including an inherited IRA. Had the mother left the assets in the IRA or transferred (non-reportable trustee-to-trustee transfer) it to an inherited IRA, then the assets could have been distributed over her life expectancy.

James, I agree with MBozek, Roth IRA excess contributions removed after the deadline are treated as regular Roth IRA distributions, which means that the amount is tax- and penalty-free. This is true regardless of the amount. For Roth IRAs, excess contributions not removed by the deadline are automatically designated as a contribution for the next year…with the 6-percent penalty applying. Also the $2,000 you mention in your comment “I am assuming the contribution was over $2000.”, wouldn’t this be increased to the contribution limit for the year ( $3,000/$3,500). I think the $2,000 limit applies to years before 20012

As far as I know, only a 401(k) plan can be converted (amended) to a SIMPLE 401(k). See IRS Revenue Procedure 97-9 attached Revenue_Procedure_97_9_.pdf

See also Notice 96-64. It modified 89-23 and you may be able to use it instead of 95-48 http://www.unclefed.com/Tax-Bulls/1996/NOT96-64.PDF

Notice 89-23 attached Notice_89_23.pdf

I agree with MBozek’s comment above. Since EGTRRA, we have received numerous requests from plans asking us to confirm that the assets from the IRA are rollover eligible. In most cases, such requests are for 403(b) affiliated organizations like PERA. Of course, we are in no position to provide such confirmation since only the IRA owner can tell for sure whether the assets are rollover eligible. When the plan representative refuses to deposit the check without the confirmation from the custodian, we ask the client to provide us with the confirmation in writing….then we write a letter to the plan to the effect that “…the client has indicated in the attached letter that the assets are rollover eligible…or does not include post-tax assets. Please contact the client for any additional information regarding the rollover eligible or pre/post tax status of these assets…”. In effect, we have not confirmed any such information, we merely just attached a noncommittal cover letter to the client’s letter of confirmation. It always works

Yes...assuming the 401(k) allows for rollovers from IRAs. …because only the pre-tax amount can be rolled to the QP, therefore, the balance after that would be the post-tax amount.

The 2004 version of 1099-Q, 5498-ESA and their instructions are available. There was some concern whether the rules for reporting earnings and BASIS for ESA distributions would change. Thank goodness, they have not. http://www.irs.gov/pub/irs-pdf/i1099q.pdf http://www.irs.gov/pub/irs-pdf/f1099q.pdf http://www.irs.gov/pub/irs-pdf/f5498e.pdf http://www.irs.gov/pub/irs-pdf/i5498e.pdf

True. CashBalance- remember after death, it is the life expectancy of the beneficiary that is used- not that of the deceased. Therefore, for purposes of the stretch-out options, choosing a younger beneficiary is more advantageous. For instance, if the beneficiary is age 40 the year following the year of the IRA owner’s death, the IRA may be stretched over a life expectancy of 43.6 years. If the beneficiary is age 25 the year following the year the IRA owner dies, the IRA may be stretched over 58.2 years… age 10= 72.8 years and so on.

Gregory, I think the plan would be required to pay the RMD to avoid having an operational failure, i.e. failure to pay minimum required distributions under Code section 401(a)(9) on a timely basis, which result in plan disqualification ( given that a plan must provide that RMD amounts are distributed by certain deadlines…but as WDIK’s signature says “...but then again, What Do I Know?”…except that WDIK is being modest, and I am being honest

Regarding your heading- If you are saying that the financial institution will allow the designated beneficiary to use his/her life expectancy when the IRA owner dies before the require beginning date(RBD), then that is correct and in keeping with the stretch provisions. Generally, the stretch allows the first generation beneficiary to designate a second generation beneficiary ( and a third generation beneficiary and so on) . However, regardless of the number of generations of beneficiaries that the IRA is passed on to, the only life expectancy that can be used is the life expectancy of the first generation beneficiary.

dubya, goldtpa is right . See IRS Notice 98-4 Q&A B-3

A 401(a) plan is a qualified plan, which includes profit sharing plan, money purchase pension plan, defined benefit etc.etc. IRC 401(a) is the section of the US Code that defines that requirements for a qualified plan See http://www4.law.cornell.edu/cgi-bin/htm_hl...ter_first_match IRS Publication 560 provides some basic information on some qualified plans. See http://www.irs.gov/pub/irs-pdf/p560.pdf

I see your question sign…it is actually www.aba.com exact location http://www.aba.com/icbcertifications/certi...on_programs.htm

I am scheduled to take the exam in August as well. Passed the C-1 in May. But I may reschedule the C-2-- not enough time to study

I agree with Blinky, ... the RMD amount just represents an ineligible rollover contribution, subject to correction by a ‘return of excess contribution’ from the IRA. Technically, the direct rollover is a distribution, which unfortunately included the RMD amount. Therefore, the plan did satisfy the RMD. The first distribution from the plan (during an RMD year) always include the RMD. Therefore, returning the amount to the plan would not be a solution, as the direct rollover amount already represents or include the RMD amount

Right- an employer cannot maintain (contribute to) a 5305-SEP while maintaining a qualified plan. By definition, a prototype SEP is not a qualified plan --- as you know, qualified plans are defined under 401(a), while a SEP is defined under 408(k)… Generally, SEPs are exempted from filing 5500

No. Providing the SEP is a prototype or individually designed SEP . A 5305-SEP cannot be used in tandem with another plan

Yes, you can. There is no requirement to keep them separate, as all your Roth IRAs are treated as one for purposes of determining whether distributions are qualified. Prior to the Final Roth IRA regulations being issues, it made sense to keep Roth conversion and Roth contributory assets separate, as the five-year ruled applied separately to each Roth IRA- ---and regular contributions could not be made to a Roth conversions IRA (or was it the other way around? it does'nt matter any more) ---

I am curious- how was the 1099-R coded? Since after-tax funds became rollover eligible (under EGTRRA), there have been numerous individuals who have unwittingly elected to rollover their after-tax amount to their IRA, without realizing that one can’t just select the after-tax amounts for distribution from the IRA. After the amount has been rolled over to the IRA, there is no means of 'correcting' the transaction, because after-tax finds are now rollover eligible. (Prior to 2002, the after-tax amount would be removed as a “return of excess contribution”). Going forward, distributions from any of your client’s traditional IRA will be prorated to include a portion of the pre-tax and after-tax amounts- same principle when non-deductible contributions are made to the IRA. IRS Form 8606 and the instructions (for Form 8606) provide step-by-step instructions on figuring the amount attributable to after-tax VS pre-tax. Withdrawals attributable to after-tax amounts will be tax and penalty-free- the balance will be subject to ordinary income tax and the 10-percent early distribution penalty. IRS Form 8606 is available at www.irs.gov