Appleby

If you send a notification (restatement information) to your former client, you have done more than you are required to. If your client went to another plan sponsor, then it is that new sponsor’s responsibility to ensure that the client restates the plan, not yours. That’s why some employers are leaving their current plan sponsor and trying to obtain certifications from plan sponsors who have already received their opinions letters from the IRS

415(e) was repealed for plan years beginning 1999. Wouldn’t this mean that it would be a non-issue for the plan?

Good question. This is only one of several PLR’s issued with the similar outcome (for 1998 conversions). The IRS’ instructions to IRA custodians are to report recharacterizations for either current year or prior year. I.e. Use Code N for an IRA contribution that was made for 2001 and was recharacterized in 2001. Use Code R for an IRA contribution that was made for 2000 and was recharacterized in 2001. As a custodian, I would report the transaction as a prior year (one that meets the time requirement). It would then be up to the client to include an explanation to the IRS when the 1040 is filed. Any thoughts…

According to the RMD regulations, inherited IRAs must be maintained separately, i.e. they should not be combined.

Assets cannot be rolled or transferred between a US plan and any other plan that is not subjected to the jurisdiction of the United States courts. At the point of distribution, the assets from the US plan will be subjected to US taxes ( unless they are rolled to a US eligible retirement plan).

A couple, whose income exceeded the $100,000 AGI limit, received permission from the IRS to recharacterize their 1998 conversion. The deadline to recharacterize is 6-months after the date the letter was issued.

Under IRC 410 (a)(2), no maximum age provision is permitted

NO! The IRS’ position on this is very clear. The first distribution from your IRS is deemed to be (or include is it is more than) your RMD. Therefore, the individual who attains age 70 ½ in 2001 must take his/her RMD before doing a partial or full conversion. Remember that the RMD is due for 2001. The April 1,2002 extension for the first RMD is merely that, as extension…

That is correct assuming the IRS over has one IRA. However, if the IRA owner had multiple IRAs, the limit would be on the distributing IRA or distributed assets.

Gary Lesser is on the case- see the link below http://benefitslink.com/boards/index.php?showtopic=12396

…In addition, in the year the IRA is being rolled to the profit sharing plan, the RMD must be taken from the IRA first and the balance rolled over. Remember…. The first distribution always includes the RMD for that year.

In addition, under the new RMD rules, the RMD for an IRA that was inherited from a non-spouse IRA owner (or the inherited IRA of a spouse beneficiary who did not chose to treat the IRA as his/her own) cannot be taken from a regular participant IRA.

Amounts converted to a Roth IRA must remain in the Roth IRA for five years in order to avoid the 10 percent additional tax (premature penalty). The penalty will not apply of the IRA holder meets one of the exception under 72(t), these include attaining age 59 ½. For the amounts that you converted 1998, you will not be able to take a penalty free distribution until 2003 ( unless you meet an exception)

Using forfeitures to offset employee deferrals is tantamount to a reversion, as employee deferrals are taken from the employee’s “paycheck’ so to speak and is not considered an employer contribution (technically- see R. Butler’s explanation) As this is a profit sharing plan, the forfeitures should be allocated to the individual participants who are entitled to share in employer contributions- including those who did not defer. I.e. the forfeiture should be a contribution in addition to any deferral contribution made by the employee

I will opt for incomplete and therefore misleading. While it mentions when a spouse beneficiary should begin distributions, it failed to provide the calculation method used by the spouse. This would cause one to incorrectly assume that the option for both spouse and non-spouse beneficiaries is non-recalculated.

txdd, A TAX ID is not required but the IRS strongly recommends that one be obtained by the sole proprietor for the business and the plan, as it helps to make a distinction between the individual and his/her business (note: the IRS identification process relies heavily on Tax ID numbers and this helps).

It depends on who the beneficiary is. For a spouse beneficiary, the life expectancy is done on a recalculated basis, i.e. the table is visited every year to determine the life expectancy. However, for non-spouse beneficiaries, the life expectancy is determined on a non-recalculated basis, i.e. determined in the first year by consulting the tables, and then by subtracting 1 for every year afterwards.

Good catch. I will bring it to their attention immediately

No. These are seperate animals from the Roth IRA

The five year rules applies only when the participant dies before the required beginning date, i.e. before April 1, following the year of the 70 1/2 birthday anniversary. The daughter is permitted to take distributions over her single life expectancy (according to the New proposed RMD regulations), beginning 2001

Take a look at this article http://ira.mpower.com/commentary/feature/feature.xsp

Belgarath You are right. Conversion amounts are not factored in the MAGI for determining eligibility to convert to a Roth IRA. If is did, those will $million IRA balances would not be able to convert.

The RMD for year of death is calculated as if the IRA owner is still alive. See the follwing link for more information http://benefitslink.com/boards/index.php?showtopic=12348

Here's a good piece on the subject http://www.corbel.com/news/pensionupdatesd...tail.asp?ID=158

I have seen this question posted quite frequently on this Website, i.e., can IRA losses be deducted. This article provides a detailed explanation See the attached link http://ira.mpower.com/commentary/feature/feature.xsp