- quote -

Does he qualify to use the lump sum averaging? And if so,
is the hit still a big one? Remember that someone will need
to pay the tax on the income from the deferred comp either
now or when it is ultimately withdrawn from the IRA. so you
need to consider the income of heirs at the time your client
dies in addition to estate tax possibilities.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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RAYMOND MORGAN wrote:

- quote -

First of all, what do you mean by "deferred comp account."
Is that already some kind of retirement account? Or just
plain old ordinary income? If the former, what kind of
account? 401 k? 403 b?

(rest snipped until we know about this.)

Happy New ChEAr$,
Harlan Lunsford, EA n LA

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"RAYMOND MORGAN" <raymond.morgan[at]worldnet.att.net> wrote:

- quote -

The problem comes down to what you mean in this specific
case of "deferred comp account". If this account is a
QUALIFIED PLAN, then you can do the rollover to an IRA. If
it is a nonqualified deferred comp plan, then no rollover is
permitted.

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- quote -

As long as he takes his RMD, he can roll the rest over, no
problem.

Helen, EA in PA
Director, NAEA; Immediate Past President, PSEA; Tax Expert, AOL
Enrolled Agents - THE Tax Professionals

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Ok everyone, I need some help. I have an elderly client who
has been forced to take a lump sum distribution from a
deferred comp account. He is 78 years old. He does not
need the money right now but would like to do something with
it to keep from taking a large tax hit this year. I have
been told by a financial advisor that the 70 1/2 limitation
for contributions to traditional IRAs does not apply to
rollovers. If so, then this is obviously what I will
recommend. Making sure we set up withdrawals to meet the
RMD. I have searched the IRS site and other resources, but
can find nothing that addresses this specifically. Can
anyone point me to some documentation for allowing this or
prohibiting this specifically?

Kathy Morgan

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