MBCarey Posted July 16, 2008 Posted July 16, 2008 Can a participant in a qualified plan that has been making regular deferrals into the plan and terminates roll his balance over to an IRA and have it converted to Roth contributions? If so, what would he need to do? Pay taxes on the money immediately or claim as income at end of the year. This sounds a little strange to me.
masteff Posted July 16, 2008 Posted July 16, 2008 Actually it can now be rolled direct to a Roth. This was added by the Pension Protection Act of '06 (PPA '06), specifically Section 824 of that act. See IRS Notice 2008-30 (IRB 2008-12). http://www.irs.gov/pub/irs-irbs/irb08-12.pdf It's been discussed elsewhere on this board that the MAGI limit that applies to conversions will apply to rollovers made in 2008 & 2009, but not to 2010 and after. Q&A-6 discusses the withholding requirements for the plan (not mandatory but optional w/hldg is allowed). Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now