MTW wrote:
- quote -

I should have mentioned the $1M limitation for traditional
IRAs and Roth IRAs. I don't believe co mingling is an
issue. My interpretation of the wording in Sec. 224 of the
bill leads me to believe, that the $1M exemption refers to
those assets in the account that were not part of any amount
that was rolled over from a qualified plan. Text is below:

e) ASSET LIMITATION-

(1) LIMITATION- Section 522 of title 11, United
States Code, is amended by adding at the end the following:

`(n) For assets in individual retirement accounts
described in section 408 or 408A of the Internal Revenue Code of
1986, other than a simplified employee pension under section
408(k) of such Code or a simple retirement account under section
408(p) of such Code, the aggregate value of such assets exempted
under this section, without regard to amounts attributable to
rollover contributions under section 402(c), 402(e)(6),
403(a)(4), 403(a)(5), and 403(b)(8) of the Internal Revenue Code
of 1986, and earnings thereon, shall not exceed $1,000,000 in a
case filed by a debtor who is an individual, except that such
amount may be increased if the interests of justice so require.'.

--
Alan
http://taxtopics.net

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A.G. Kalman wrote:

- quote -

Doesn't the Bankrutcy Bill limit this protection to
$1,000,000? Granted, that won't be a problem for most of us
<grin> , but perhaps it leaves open the possibility that
applicable state law limits might give you a better break in
some cases. This might also resurrect the issue of whether
Roth IRAs are treated less favorably in this context.

Also, I noted that rollover IRAs (rolled from qualified
plans, I presume) are possibly NOT subject to the $1,000,000
limit. Thus, you might want to NOT commingle such rollovers
with your contributory IRA accounts, lest you lose the
ability to make this distinction.

MTW

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A.G. Kalman wrote:
- quote -

I had a chance to review the Bankruptcy Bill and found that
the bill exempts IRAs and Roth IRAs. Specifically, it exempts
retirement funds in accounts under IRC sections 401, 403, 408,
408A, 414, 457, and 501(a). IRAs are protected immediately by
the USSC decision. Roth IRAs are protected commencing six
months after enactment.

The bill provides an exemption for CESAs and Sec. 529 tuition
plans. It limits the exemption to $5000 for deposits within
two years before and one year before filing and provides no
exemption for deposits within one year of filing.

Links to the bill, CCH analysis and House Report:
http://thomas.loc.gov/cgi-bin/query/z?c109:S.256.ENR:
http://www.cch.com/bankruptcy/Bankruptcy_04-15.pdf
http://tax.cchgroup.com/Tax-Briefing...Bankruptcy.pdf
http://thomas.loc.gov/cgi-bin/cpquer...#91;at]1(hr031)

--
Alan
http://taxtopics.net

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MTW wrote:
- quote -

I agree with you. The elements, other than tax deferral,
that the court used for their rationale are missing in a
Roth. Has anyone browsed the Senate passed version of the
Bankruptcy Bill to see if all types of IRAs are excluded?

--
Alan
http://taxtopics.net

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A.G. Kalman wrote:

- quote -

Food for thought issue: Contributions to Roth IRAs (not to
be confused with conversions or earnings) that can be
withdrawn at any time WITHOUT PENALTY would appear to NOT
meet the rationale established by the court.

MTW

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In a unanimous decision the US Supreme Court overturned an
Eighth Circuit decision and ruled that IRAs are exempt from
the bankruptcy estate. See Rousey v. Jacoway:
http://supct.law.cornell.edu/supct/html/03-1407.ZS.html

--
Alan
http://taxtopics.net

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