Appleby

Just in case someone finds this post- like I did when I searched via Google. http://benefitslink.com/links/20021029-019131.html ...

It seems McKay Hochman is right. If we look at Notice 2007-7 , it says that the amount is rollover eligible only for purposes of 402©, and not the withholding rules under 3405. Q&A 15. http://www.irs.gov/pub/irs-drop/n-07-07.pdf If you look at WRERA, for the amendment to Section 829 of PPA, it says ©(11) applies to rollovers for non-spouse beneficiaries and can be viewed here http://www.law.cornell.edu/uscode/html/usc...02----000-.html The amendment to Section 829 , subsection © says WRERA available here http://frwebgate.access.gpo.gov/cgi-bin/ge...publ458.110.pdf . The amendment to section 829 is on page 19

Update... http://www.mhco.com/Library/Articles/2009/...0WH_080709.html

If the distribution is rollover-eligible, you have 60-days to deposit it to your Roth IRA. The deposit should be treated as a Roth conversion by you and the IRA Custodian. There are no RMDs for this year, which means that if your distribution represents (what would have been) your RMD, it can be converted to your Roth IRA. Please post any follow-up questions.

I think you can use the pooled accounting system, as long as you maintain separate accounting. However, the Roth assets may need to be maintained in a separate account from the traditional assets- see thread references by WDIK.

Brokerage houses are requiring that Roth assets be maintained in separate brokerage accounts, and have made programming changes to that effect, and the account opening and statement issuing process for those accounts have been designed accordingly (the account registrations and statements usually reflect ‘Roth’ in the account title fir ID purposes). Maintaining the assets in a pooled account may make it seem like it should be a non-issue from our perspective, especially if they (the brokerage firms) are not performing the tax reporting; and from our POV the question may be ‘why should they care’ since all they are doing is custodying the assets? However, there are at least two key reasons why it may make sense from their perspective:  The tax-reporting requirements, which requires a separate 1099-R for DRA amounts. There could be circumstances when they are required to (perform the tax reporting) for the plan - such as for certain orphan accounts if they are designated Qualified Termination Administrator.  They had to build the system for the plans for which they perform tax-reporting, and to make it easier for everyone, they apply the rules to plans for which they perform tax reporting as well as those for which they do not perform tax reporting. No sense in having two set odf rules for the same type of account- it is hard enough to explain the rules that apply to one  A big part of what they do is track assets for marketing purposes, which means they will want to know ‘how they are doing’ in the Roth-K market.

You can make your new Roth IRA contributions to your new Roth IRA. There are no rules against maintaining multiple Roth IRAs, as long as the total contributions that you make to one or more of those Roth IRAs for the year do not exceed the limit in effect for the year ( $5,000 for 2009- $6,000 if you are at least age 50 by the end of the year). You may want to think about the fees that you will pay for each IRA, so as to determine if it makes sense to maintain the two separate accounts, or if it is better to combine the accounts. For instance, would you be paying two maintenance fees? Will you pay more trade related fees – which could be the case if you want to buy 100-shares of a certain stock and do not have enough funds in one Roth IRA and therefore need to buy some shares in one and the rest in the other?

Good point Jenny, I think the same 180 days would apply , as the rollover notice cannot be more than 180-days old. It used to be 90-days, which may explain why some of the plans mentioned above use 90 and some use 180. See Section Vlll of Notice 2007-7 http://www.irs.gov/pub/irs-drop/n-07-07.pdf

I think the 180-days is the maximum period, because of the withholding notice requirement. If you provide the withholding notice separately from the form , then you may be able to use the form for a longer period if your internal Compliance rules permits it. If I remember correctly, you can send a withholding notice and assume a default election, if you do not receive a response from the participant within a certain timeframe.

Lino to PLR 200343030 here http://ftp.irs.gov/pub/irs-wd/0343030.pdf

There are PLRs where the children were allowed to transfer the assets to their inherited IRAs, when the estate was the beneficiary and they were the beneficiaries of the estate. See PLR 200343030. This was for an IRA though, and they were required to use the life-expectancy distribution options that applied to the estate. I am not sure that this would be permitted a QP. For one, the plan must distribute the assets to the estate so as to conform to the terms of the document. And if the assets are already paid to the estate- I don’t think the non-spouse beneficiaries would be able to complete a rollover of those amounts as non-spouse beneficiaries cannot rollover inherited amounts. It seems one of the key determining factors here is the ability to complete an indirect-rollover (funds distributed, but were not distributed as a direct rollover). Under the IRA, the funds would move as a transfer, which is permitted for both spouse and non-spouse. With the QP, it would be a rollover, which is permitted for a spouse, but not a non-spouse. PS. I am not an attorney lawyer, but I play one on TV

Adding to some of the comments above… If the amendment occurs mid-year, there could be an issue with satisfying the notice requirements. According to the SIMPLE IRA LRM, the amendment must be effective as of the first day of the year. The LRM also says that the amendment must conform to the content of the plan notice for the calendar year. If the employer had used the 5304, the notice would have addressed the ‘you can choose whichever financial institution with which you want your account to be established/maintained’ disclosure requirement. Since the employer used the 5305-subject to DFI rules, such a notification would not have been provided. This would mean that if the amendment is permitted, an Amendment to the Model Notification would need to be provided to participants. The question then becomes, if an employer prevented an employee from choosing his/her financial institution on January 1, but the employer is now saying” hey, you know what, you could have chosen your financial institution after-all” . Since this cannot be made retroactive , that could create an issue . Another possible issue is the fees and penalties that could apply to transferring the accounts. If limitations were placed on the investments from which the transfer could be made without cost or penalty and/or the period during transfers could be made without cost or penalty, these restrictions would need to be lifted or the fees/penalties waived. It's an interesting issue... Denise

Bump...good topic TD Ameritrade does not charge an annual maintenance fee http://www.tdameritrade.com/retirementaccountsdetail.html

You may be thinking of when the IRS disallows the deduction, such as in a case where the plan document is not approved by the IRS ( plan adopted pending IRS approval of document)

Yes...as long as both companies are not related or affiliated...and it would be 20% of modified net profit

I am not an expert on this topic either... I check with a firm that holds annuities in self directed IRAs and they confirmed that it is reported as a distribution on Form 1099-R. However, according to their operations, the annuity company approves the distibution and performs the tax reporting. Not sure if TD 9418 (available here http://www.irs.gov/irb/2008-38_IRB/ar07.html) would apply in this case; it addresses the valuation of an annuity when it is converted to a Roth IRA. But, since a Roth conversion is –technically- a distribution and a rollover, I figured we could apply the valuation premise to distributions from IRAS to non-qualified annuities. The valuation process is summarized in the first paragraph under “Explanation of Provisions”

You should withdraw the excess in order to avoid the 6% penalty, You will need to calculate the net income attributable (NIA)/loss on the amount and withdraw the net amount. For instance, if the loss is $500, you would withdraw $3,000 ( $3,500-$500). NIA formulae available here http://www.retirementdictionary.com/nia.htm The following is from IRS Publication 590 590 available here www.irs.gov

Neither have I...the benefitslink newsletter would have included that information for sure

..or 20% of your modified net profit when you are unincorporated

The custodian usually files the 1099-R if they are also the prototype sponsor and the plan-sponsor delegates the responsibility of filing to them. I can see how Cynch’s scenario could occur in a case where the Employer establishes a QP with a custodian, where the custodian is not the prototype sponsor. So, except for ensuring that earnings are not reported as income (the account flagged as one not-subject to withholding on income/earnings), the custodian assumes no retirement-plans related responsibility. In such cases, the TPA should be on record to receive notification of activity that occurs in the account so that proper records can be maintained; if such provisions are not made, the TPA is not made aware of any activity unless they receive the information from the employer. Unfortunately, this scenario occurs often…

The 30-day period begins on the day of the recharacterization. In your case , you would be eligible to reconvert today- the 13th. Regarding the error, the correction should have been just that ‘ and adjustment’ and not a re-do of the recharacterization, so it should not affect your deadline. Check with the IRA custodian and make sure that the Fed12 transactions are not reportable transactions- which means you should not get a 1099-R or 5498 for the asset movement.

You may have already seen this...but just in case ...http://www.americanbenefitscouncil.org/documents/mrd_requestforguidance_council020609.pdf ://http://www.americanbenefitscouncil....ncil020609.pdf ://http://www.americanbenefitscouncil....ncil020609.pdf ...

After a frustrating few hours trying to figure out why my Print Screen prt sc button on my Vista laptop keyboard would not work, I figure it may help to post what I found here: In order for the print screen button to work, the FN button and the print screen button must be depressed at the same time. The Fn button is located beside the Windows logo ( bottom right hand corner). You can also use the Print screen function by doing the following: Click on Start , then All Programs , Accessories, Ease of Access , On Screen keyboard , then Prt Screen. The best- IMO- is the Snipping Tool. To find this, type Snipping Tool in the search bar. It walks you through the process.

Outstanding. Love it!

Awww...