Appleby

The two-year period applies to any SIMPLE IRA transaction that involves moving the SIMPLE IRA assets to another retirement plan that is not a SIMPLE IRA.

The 2002 RMD is added to their modified AGI for purposes of determining eligibility to convert to a Roth IRA. This is no longer so, effective for tax years beginning 2005

No. Your 2002 income has no effect on your 2001 contribution. Any recharacterization of a 2001 contribution to a traditional IRA will just make the contribution a Roth IRA 2001 contribution. You are still in 2001.

According to Announcement 97-122, found in Internal Revenue bulletin 1997-50, the IRS recommends, but does not require, that the conversion Roth IRA be maintained separately from the regular Roth IRA. This was necessary because it was not determined how distributions from Roth IRAs would be taxed. Technical corrections were later passed, affecting, among other things, the taxability of distributions from Roth IRAs. These are the ordering rules. The 5305-R that you mentioned, encouraged individuals to maintain, qualified rollover contributions /conversions (described in section 408A(e)) in separate Roth IRAs from Roth IRAs containing regular Roth IRA contributions {describes in section 408A©(2)}. The ordering rules negate the necessity of maintaining separate accounts. Many custodians are still using the old version of the form. If you are using the old version of the form, you must check the ‘Regular Roth IRA’ box. If you already established the account and check “Roth Conversion IRA’, then you need to complete a new form and amend the account. A Roth IRA established as a ‘Regular Roth IRA’, can receive both conversions and regular contributions. A Roth IRA established as a ‘Roth Conversion IRA’ may hold only Roth conversion assets.

I think not. This is requirement for qualified plans

You may not establish new SARSEPS, but those in existence before 01/010/97 were grandfathered. New participant may be added to these plans.

The family aggregation rules were repealed for tax years beginning after 1996. I assume you mean family attribution rule. The response would be the same for SEP and SARSEPs

Yes, you may establish a SIMPLE for year 2002. This must be done by October 1,2002 There is no formal way to terminate a SEP. If you have other employees, just notify them in writing that the SEP is terminated. You and those employees may either retain the assets in the SEP IRA or transfer the assets to a regular traditional IRA. The definition of income for a Self-employed individual is not the same for a SEP and a SIMPLE. For a SIMPLE, compensation is net earnings, before subtracting contributions to the plan. For a SEP IRA, compensation is reduced by contributions made to the plan.

No. The partnership must establish the plan.

True txdd, However, a successor beneficiary may continue distributions over the life expectancy of the fist beneficiary

Yes to question number 1. Under the new regulations, each beneficiary may still make separate elections.

Is it a Keogh or an IRA? Remember that a Keogh is just a qualified plan established and maintained for a self-employed individual. The Keogh could be a 401(k) plan or any other qualified plan.

Absolutely.

Submit a distribution request to your IRA provider for a “Return of Excess Contribution” BY APRIL 15 2002 for the excess contribution amount. If there are any earnings, you will need to add the earning to your income for the year the contribution was actually deposited to the IRA.

For a SEP IRA purposes, the one-year period is defined as any period, however short. This means that if an employee performed services for, say one day of the year, that constitutes one year. Further, if you have a one-year eligibility period, this one-year is one of the “preceding three years”. If you are making a contribution for year 2001, this employee will not be eligible as she did not perform services for any period during the preceding three years which are years 2000,1999 and 1998. She will however, be eligible to receive employer contributions for year 2002. The 10 percent contribution for 2002 must be based on her total 2002 compensation.

To the best of my knowledge this has not been addressed. Unanswered questions are " how will the taxpayer indicate on the income tax return that the amount has been converted? also, how till the taxpayer indicate that the non-taxable amount has been rolled to an IRA? I assume by filing IRA Form 8606, as is done for non-deductible contributions... but I am unsure. In any event, I doubt you will be able to convert 'just the non-taxable portion". I assume it will be pro-rated similar to non-deductible contributions.

Each of you may establish and fund a Roth IRA.( $,2000 each) The deadline to fund a Roth IRA for 2001 is April 15,2002.

Yes. See the rollover chart at http://www.tagdata.com. Note, generally when assets are being moved between qualified plans that belong to the same employer, the movement is done as a transfer (not reportable on a 1099-R) not a rollover....except when the delivering plan is terminated

The CPA is wrong. Suggestion?- get a new CPA who understands the regs

This URL will take you to the Roth IRA final regulations. http://rothira.com/rothregsf.htm Perform a word search for '5-year'

The five-year period begins on the first day of the year for which the conversion as made. For example, if your conversion was done in 2000 ( it doesn’t matter if it was January 1 or December 31), then five year period would begin January 1,2000

It depends on your state of residency. See the URL below. http://www.ici.org/issues/99_state_ira_bnkrptcy.html Note that your son must have earned income in order for a Roth IRA to be funded on his behalf (with the exception of a Roth conversion).

Absolutely they could. Remember, a SEP is just an IRA that accepts SEP employer contributions. The transaction could be done as a rollover or as a non-reportable transfer

Yes.

Congress has instructed treasury to prepare a new table. No deadline was given. The new table has not yet been issued (I doubt even drafted). Until the new table is used, the old tables must still be used.