Appleby

franky Regarding the term “transfer”…Bear in mind that the IRS sometimes use "transfer" to mean "movement of assets", and not necessarily "transfer" in the operational sense. This is evident in many PLRs that allow "trustee-to-trustee transfers" from qualified plans to IRAs, and allows Roth IRA conversions VIA a "trustee-to-trustee transfer" from the traditional IRA to the Roth IRA. From a practical perspective, you cannot “transfer” asserts from a qualified plan to an IRA. A “transfer” is by definition a non-reportable transaction. The movement of assets from a qualified plan to an IRA must be done as a rollover, which is a reportable transaction. Refer instructions for Form 1099-R and 5498.

No issue... Given that your SIMPLE IRA meets the two-year requirement, you may convert the balance to a Roth IRA. The SIMPLE account can continue to receive SIMPLE IRA contributions

The seperate accounting rule, for purposes of determing the factor used to calculate post death distributions does not apply to trust beneficiaries. The life expectancy of the oldest beneficiary under the trust must be used

Just want to add the cites: In accordance with IRC 318, 416(i) and Notice 97-75 ...once you are a 5 percent owner, required minimum distributions must continue even if the employee ceases to be a 5 percent owner Notice 97-75 is attached

And this http://benefitslink.com/cgi/qa.cgi?databas..._id=8&mode=read

Check this out Fraudulent QDROs

mcdonnell, good catch.. I did mean 2002. ...thanks

Felecia, this sounds like a question for the pension plan, and not really an IRA question. From the IRA perspective, the issues are: Can the assets be moved to the governmental pension plan. Answer, generally yes, if the assets are Traditional IRA assets, except for RMD amounts and other non-rollover eligible amounts. How would the movement of assets be treated? Answer, as a direct rollover from the IRA. The 1099-R issued for the IRA would reflect code ‘H’ in box 7. The plan will determine: -If the plan accepts rollovers from IRAs -The origin or source of assets that can be used to purchase past service credit

four01kman…I know you understand this…but I need to add points of clarification for our readers who may not be as familiar with the rules as you are… the distribution is treated as ordinary income the year the distribution occurs, which is not necessarily the year of receipt. For example, if the distribution occurs in December 2002, but the IRA holder receives the check in 2003, the distribution is taxable in 2003. The 10 percent early withdrawal penalty applies if the assets are distributed while the IRA owner is under age 59 ½

Right John…also, IRA holders must be sure to make proper withholding elections when completing Roth IRA conversion requests… because a Roth IRA conversion is technically a distribution and a rollover, the amount leaving the Traditional IRA is treated as a distribution for tax withholding purposes. This means that if the IRA holder does not make a tax withholding election (example elect to have NO taxes withheld), the IRA Custodian/Trustee must withhold 10 percent of the amount being converted for federal taxes. If the Custodian practices withholding for State Tax, these rules would also come into play.

This URL takes you directly to the section of IRS publication 590 that addresses Recognizing Losses on Investments (in Roth IRAs) http://www.irs.gov/formspubs/page/0,,id%3D...31,00.html#T102

The distribution was done in time, therefore there will be no penalties ( excess accumulation penalties). The assets are considered distributed when the check is issued. This means that this is a 2002 transaction for tax reporting purposes.

Apparently the attachments must be done one at a time

Kirk, you are right about Notice 87-16. I could not find anything on Announcement 91-4 . Another reference is Announcement 86-121 Documents are attached

If the IRA owner refuses to cooperate, then the plan has the option to take the matter to court. There have been such instances where the participant refused to reimburse the plan... the plan sued the participant and won. Surely if it was an option the plan would be better served to work with the IRA custodian?

Jaemmons, the IRA custodian cannot disburse assets from the IRA without written permission from the IRA holder . Instead of contacting the IRA trustee/custodian, the plan administrator must work with the IRA owner to have the assets distributed from the IRA and returned to the plan… since the assets are considered ineligible rollover assets, the distribution should be done as a ‘return of excess contribution”, which will not be treated as taxable income, except for any earnings.

IRS Form 1042-S is used to report withholding for a non-resident alien. 1042-s would not be submitted to the state as it is a federal form ...also state tax would not apply to the non-resident alien

Answer is no…Spousal consent is required if the plan balance serving as security exceeds $5,000. Given that only the vested balance can be used to pledge as security for a loan, the $5,000 is limited to the vested balance, not the entire balance.

Somehow, Fishchick I think you are one of us where hard work can translate into fun, if the work is something you enjoy… A couple of points for consideration… 1) Don’t forget that SIMPLE 401(k) plans are not subjected to discrimination testing… 2) The section of 408(d)(7) to which you refer is subsection (A)… the amendment was to subsection (B), which makes reference to paragraphs (4) and (5), which addresses Return of excess contributions from IRAs… PS. You referred to me as "Mr. Appleby” just 'Appleby' is fine, but if you really want to use a prefix, Ms. would be one to use

URL for the IRS Restructuring and Reform Act of 1998 (IRRA) /(P.L. 105-206). http://frwebgate.access.gpo.gov/cgi-bin/ge...publ206.105.pdf

Yes.. given that the two year requirement has been met( i.e. the SIMPLE IRA has been in existence for at least two years, beginning with the first day the employer deposits a contribution.) the SIMPLE IRA assets may now be ROLLED to the QP /EGTRRA 408(d)(3)(G)(ii)

Gary, I just faxed you the page from H.R. 2676 (P.L. 105-206). The exact cite is 6018(B), which provides that 408(d)(7)(B) should be amended to include SIMPLEs

Yes... providing the SIMPLE IRA meets the two-year requirement, i.e. the SIMPLE IRA has been in existence for at least two years, beginning with the first day the employer deposits a contribution.

For defined contribution plans, in which the contributions are discretionary, you are considered an active participant for any year you actually receive a contribution… Note that this is so even if the contribution is being made for another year.

The IRS does NOT allow you to move assets directly from a 401(k) plan or any other qualified plan to a Roth IRA. The assets must first be rolled to a Traditional IRA and then converted to a Roth IRA. If all the assets are truly non-taxable, then you can convert them (the assets) to a Roth IRA and take a tax and penalty free distribution anytime after the conversion,