Appleby

http://benefitslink.com/IRS/notice2004-8.pdf From BenefitsLink Retirement Plans Newsletter 12/31/03

mbozek…that is assuming the stock is the only investment in the IRA. If that is so, and the security is indeed worthless, then taking the RMD amount would be impossible---Assuming the individual has no other IRAs. Under the SEPP rules, any penalties would be waived if failure to meet the SEPP payments is as a result of Complete depletion of assets… IMO, there is no reason why the same treatment, i.e. the waiver, would not be applicable here---again assuming the individual has no other IRAs That being said… I assumed that the IRA had other investments…except for bank CDs and the like, most IRAs that are SDA invests in more than one security...

Start with the issuer or the transfer agent---request a confirmation of the price as of 12/31 in writing …this should be sufficient for the custodian to update their records. In the meantime, since there is some uncertainty about the value of the security, it may be in the IRA owner's best interest to calculate the RMD amount using the highest known value… should it be determined that the distribution exceeds the RMD amount, the difference can be rolled over within 60-days. Better to exceed the RMD amount that to fall short…

Unless the distribution is an annuity, the withholding must be at least 10%…the only lesser than 10% withholding that is allowed is zero yannib ---Yes. The participant must complete form W-4P to make the withholding election. Failure to make an election would result in a withholding of 10%

Bear in mind that an employer who maintains a qualified plan ( such as a money purchase pension, profit sharing 401(k), defined benefit plan…) and a SEP cannot use the 5305-SEP form. …instead , the SEP must be a prototype SEP or an individually designed SEP

No - see http://benefitslink.com/boards/index.php?s...=tax,and,return

...and Deducting IRA Contributions at http://www.investopedia.com/university/ret...ns/ira/ira2.asp

I agree with papogi. Projections show that even for some individuals who will be in a lower tax bracket at retirement, the Roth IRA yields a higher net. Calculators are also available at www.rothira.com

Yes. You are correct

Thanks Derelict- the text of the IRC supports this--- text of IRC Sec. 408(d)(3)(B) is as follows Now what has me scratching my head is why we used to even consider pub 590, when the overriding authority is the IRC… I checked as far back as 2001, and the text for the IRC was the same.

Try your local bank as well. I prefer a brokerage account as well, but you may want to check the features , benefits and fees of them all and choose the one better suited for you

1) The December 31 deadline applies to converting your traditional IRA to a Roth IRA. However, in your case, a recharacterization would be more appropriate. A recharacterization results in the contribution being treated as if it was made to the Roth IRA in the first place. The deadline for a recharacterization is October 15 of the following year (October 15,2004 for 2003 contributions) assuming you file your tax return by April 15. 2) For a discussion on paying taxes on Roth IRA distributions see the following threads http://benefitslink.com/boards/index.php?s...14&hl=qualified http://benefitslink.com/boards/index.php?s...18&hl=qualified 3) Assuming you file as “married filing jointly” your wife will be able to claim a full deduction of her traditional IRA contribution.

I echo these sentiments … Thanks for starting this thread jevd

Yes. Assuming that you have not distributed and rolled over these same assets from another IRA within the last twelve months

There are some good one’s here http://www.plansponsor.com/pi_type11/?RECORD_ID=18836 one-time sign up required. Good rounded newsletter

Don’t know here to find this one… but there is one titled “The Auditor Who Stole Christmas” by MICHAEL E. LLOYD – Published in the ‘Journal of Deferred Compensation’ Volume 1 • Issue 2 • Winter 1996. It is outstanding!!! I am not sure if I could copy it here –copyright laws and all . If you subscribe to “Panel Pension Library Deluxe”, you can retrieve it by using the advance search feature and searching the phrase “The Auditor Who Stole Christmas”

Yes you can. As to whether it would be practical would be a separate issue…since the income is anticipated not guaranteed. Should it be determined at the end of the year that the contribution exceeds the allowable limit (i.e. more than 25 percent of your modified net profit), then you may be subject to a 10 percent excise penalty on the excess amount Note: For year 2004, the limit will be $41,000.

From my experience, the only forms that are returned to the financial institution are the participant's IRA Adoption agreement and a copy of the employer’s SEP adoption agreement (5305-SEP Etc.). Neither of these would provide any indication of the number of employees participating in the employer’s SEP IRA. Maybe my experience is limited I am not sure how maintaining SEP IRAs at different financial institutions could increase (or result in) any administrative burden for the employer, since IRA balances are not usually factored in any testing...and the employer would use the year’s contribution for any administrative purposes... Could you elaborate on that?

See the following thread http://benefitslink.com/boards/index.php?s...c=22017&hl=year

Mike, since the funding vehicle for the SEP is a traditional IRA, wouldn’t you agree that if the employer uses the IRS model SEP documents, each participant may establish their SEP IRAs at any financial institution they choose- not necessarily the one at which the employer established the SEP plan? I hear some prototypes may require all IRAs under the SEP plan to be held with their institution- I have never actually seen one….

http://www.irs.gov/pub/irs-tege/win04.pdf

http://www.irs.gov/pub/irs-tege/win04.pdf

I assume the individual is at least age 50, since you mentioned $14,000 as the deferral amount. The maximum salary deferral amount would be based on the Modified Net Profit, determined as follows Net profit- ½ SE tax. Salary deferral limit is $14,000 or Modified Net profit, whichever is less

Right--- If the individual is a Sole Proprietor or Partnership (Partner) with a Net profit of $112,000, the maximum contribution for 2003 is $33,021 + $2,000 is age 50 or older for catch up

You are not considered active just because your spouse is an active participant. While, your spouse’s active participant status may affect your ability to deduct your traditional IRA contribution, it is not necessarily an all-or-none situation, i.e. you could be able to deduct a portion of the contribution. See the chart “Traditional IRA deductibility Limit for 2003” at http://www.investopedia.com/university/ret...ns/ira/ira2.asp for details Under a defined benefit plan, an individual is considered active if he/she is eligible to participant in the plan---whether or not he/she receives a contribution or benefit for the year.