Appleby

Rich, To answer your question directly- NO! The designated beneficiary of the fist beneficiary (referred to as a second-generation beneficiary) is not permitted to roll the inherited assets to his/her IRA or retirement plan in which he/she participates. The option to roll is available only to the spouse of the deceased participant.

See the article at this thread for information on deduction IRA losses. http://benefitslink.com/boards/index.php?showtopic=13826 Regarding making a contribution prior to April 15- yes that can be done. Note however, these is no deduction for Roth IRA contributions.

Roth contributions are not reported on the individual's tax return. Yes. The IRS received the information via 5498 reporting.

simbarat Good points, Don’t forget though that some 529 plans will permit contributions of up to $150,000 per year, or maybe even more in come cases

A copy of PLR 9144041 is attached.

This website, and others state that an UTMA or UGMA account may be transferred to a 529 plan. http://www.collegeillinois.com/en/faqs/faq...dimplations.htm See the very bottom where they ask and answer “Can I rollover my child's UGMA/UTMA account to College Illinois!? To transfer UTMA/UGMA assets into a College Illinois! 529 prepaid tuition plan you must first liquidate the UTMA/UGMA. As the custodian, you may then use the cash proceeds to purchase a contract.”

Generally arithmetical or clerical errors. Bear in mind that according to congress, such a mistake is very narrowly defined. If a plan is found to use the mistake in fact reason when it does not apply, it could lead to plan disqualification.

also, if your financial advisor makes any stock recommendations, you may want to consider investing in those

By “existing account” do you mean Roth IRA? 1099-B’s are not issued for IRAs. The 1099-B is issued for cash accounts when a broker exchange occurs (e.g. sale- liquidation). Generally, the amount reported on this form must be reported on your income tax return. You used the term “transferred”. If you are referring to moving the assets to the Roth IRA, should I assume you mean contribute? Contributions made to Roth IRAs are never taxed. Only the earnings, if you do not meet certain requirements. Therefore, there will be no double taxation. In order o contribute for the year 2002, you may write a check for the amount and have it deposited to your Roth IRA as a participant contribution. No penalty will be assessed unless it is determined that you are not eligible to make the contribution, and it therefore becomes an excess contribution and is not removed timely. See IRS publication 590 , at this URL http://www.irs.gov/pub/irs-pdf/p590.pdf for additional information excess contributions and eligibility requirements for making a Roth IRA contribution

The withholding rules for Roth conversions is similar to those for traditional IRA distirbutions. This , posted by CIGNA on benefits link, may help http://www.cigna.com/professional/pdf/2002...g_BulletinT.pdf

The ‘8’ in box 7 denotes the year in which the earnings is taxable- which is the year the contribution was made to the IRA. For a contribution that was made in 2000 and removed in 2001, the code should have been ‘P’, which denotes previous year. You need to contact the IRA custodian and demand that they issue a corrected form 1099-R. No amendment to your income tax return is necessary.

You had up to December 1999 to recharacterize all or a part of your 1998 conversion. The IRS has granted exceptions to some individuals. Some of these exceptions extend the deadline even up to this year. However, it appears that these extensions are grated in cased where the recharacterization was required to be done because the IRA owner was ineligible to do the conversion (example, exceeded the $100,000 MAGI limit)- not just became the IRA owner wanted to recharacterize because of devaluation or just for the hell of it.

You will be subjected to the 402(g) limit-- $11,000 for year 2002- between both plans. The employer limits however, will be determined separately

Your conclusion is right. Note that there is also a five-year period for amounts credited to the Roth IRA as conversion amounts. These amounts , if taxable at the time of conversion, would be subjected a a10 percent premature penalty if withdrawn before five years after the conversion, unless an exception applies. The first time homebuyer is an exception.

No.

Generally, a conversion may be recharacterized ( reversed to the traditional IRA) up to October 15 of the year following the year the conversion was done. ( to get the extension up to October 15, the individual must have file their tax return or an extension, by April 15.) However, you stated that she already took a distribution from the inherited assets. As per IRC 2518, a disclaimer cannot be done after a distribution of the inherited assets have been taken. The disclaimer must be done within 9 months after the death of the IRA holder, and before any distribution was taken.

True, There are also religious reasons why some individuals may refuse plan contributions- something about being compensated outside of their regular earnings diminishes what they do for their religion .

You must use the single life expectancy table. IRS publication 590 refers to it as “single life expectancy- for use by beneficiaries.” You can always withdraw more than the minimum amount. No penalty.

A contribution must be made for the third employee beginning plan year 2002. The requirements are number of stated years of the five preceding years. In your example, the employer performed services 1 year of the five preceding years. For a SEP IRA, the year of service is nay period “however short”. This means the technically, there is no entry date. However, practically speaking, the entry date is the first day of the plan year- January 1 for calendar year plans.

Note as well that that there income caps for individuals who wish to fund a Roth IRA. These income caps do not apply to a traditional IRA, except for deduction purposes... another detail to which you may want to pay attention.

You may contribute to multiple Roth IRAs, however, your contribution limit remains the same, i.e. $2,000 or 100% of compensations, whichever is less. Due to the fees that may apply to the individual accounts, it may not make financial sense to fund multiple accounts.

QDROphile, My understanding is that the alternate payee is not eligible to take a distribution until the participant who is giving up the assets is experiences a triggering event… unless QDRO is a triggering event under the plan. If QDRO is a triggering event, then the plan administrator can issue a check for the amount, even without any instructions from the alternate payee ( involuntary cash-out).

The IRS has provisions for individual who are unable to obtain a SS#. Such individuals may file for individual tax ID numbers (ITINs). This URL provides information on how to obtain an ITIN and it’s purpose. http://www.irs.gov/efile/display/0,,i1%3D5...3D13288,00.html

True John. Generally, a notification is sent to the IRA owner who is given a certain period within which to submit the fee payment to the custodian. If the payment is not submitted by the stated deadline, then the fee is debited from the IRA balance. If he submitted the fee payment after it was already debited from the IRA, then the payment would be considered a reimbursement, and as such would be processed and reported as an IRA participant contribution. The adjustment can be done only if the payment was made before the fee was debited from the IRA

Just to make sure I understand your question. You made a $2,000 contribution to your traditional IRA in 2001 (for 2001). You paid a fee of $25. Somehow, this fee was coded as a 2001 contribution. Now you have a total contribution of $2,025 for your 2001 IRA contribution. Am I right so far? For 2002, you participate in an employer sponsored plan -401(k). You state that as a result you cannot contribute to your traditional IRA for 2002. This is incorrect. You may not be bale to claim a deduction for contributions made to your traditional IRA, but participating in a plan does not affect your ability to contribute to the IRA. You cannot recharacterize the excess amount to a Roth IRA. A recharacterization can only be done for the year for which the contribution was made. This means that a recharacterization will not change the fact that your total contribution for year 2001 if $2,025.