Arthur Kamlet wrote:
- quote -

True because it is hard coded into IRC Sec. 408(d)(8)(D). That is
why I believe my statements regarding distributions are correct.
Sec. 72 requires the allocation between taxable and nontaxable
amounts. The charitable exclusion required an exception to Sec.
72 to allow the distribution to be treated as if the amount would
have been fully taxable.

I find no exception to Sec. 72 for the rollovers we have been
discussing in this thread.

- quote -


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In article <rDpfl.9525$hc1.6972[at]flpi150.ffdc.sbc.com> ,
Alan <sfcnm-mtm[at]yahoo.com> wrote:
- quote -

The Qualified Charitible Contributions being an exception, with pre-tax
contributions and earnings coming out first.

And I'm thinking maybe the one-time IRA -> HSA might be another?
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
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Steve Pope wrote:

- quote -

Alan disagrees with this point, even if I were clear, I am open to being
wrong.

- quote -

This, I am 100% on. When you convert to a Roth, you may not designate
only the pretax money, it must be prorated to reflect the ratio within
your IRA. Again, all non-Roth IRAs are treated as one big, fat, IRA.
Stand by.

--
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JoeTaxpayer <JoeTaxpayer[at]comcast.net> wrote:

- quote -

I'm clear on the point that by transferring the pre-tax segment
of the IRA into the 401(k), the remaining all-post-tax IRA
could be Roth-converted without paying tax.

What I'm not clear on is that you couldn't do the same effective
transaction without the 401(k) existing. (Which seems to be
your point above.) Is it an issue with un-commingling
the funds within the IRA?

Sorry for being slow here!

Steve

--
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JoeTaxpayer wrote:
- quote -

They don't. But... if you have after-tax money in the pension
plan and you want to eventually roll it back to a pension and
then convert to a Roth in 2010... you should just roll the
after-tax funds directly into a Roth IRA now if your income is
below the threshold or if you can't roll it over now, keep it in
a separate IRA account from the pre-tax rollover funds.

I also would like to see some other's comment on what I said
about commingled after-tax and pre-tax funds in an IRA. I.e., you
can't designate that the after-tax amounts go to A and the
pre-tax amounts go to B on rollovers.

--
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Alan wrote:


- quote -

My employer's 401(k) accepts IRA money back in, and I though the whole
point of the posted EGTRRA link earlier was to point out that these
funds need not remain in a "rollover" designated account.

- quote -

Many here have continued to point out that you have One IRA (and One
Roth, now) but that One Traditional IRA is composed of pre and post tax
money regardless of the number of separate accounts it's in.
- quote -

I'll await other's comments on this.
Joe

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

JoeTaxpayer wrote:
- quote -

rollovers. They are a pain in the ass especially if there is
after-tax money. The pension plans do not want to administer the
after-tax money separately.

You have interpreted what I said correctly. If you have a
retirement plan that has both pre-tax and after-tax funds that
you intend to park in an IRA before you roll it back to an
accepting pension plan, then you want to create two IRA accounts
and roll the after-tax pension funds into one account or to a
Roth IRA and the pre-tax pension funds into the other IRA. If you
commingle both types of funds into one IRA, then each subsequent
distribution is also commingled funds.

PPA 2006 allows the direct rollover to a Roth IRA. This is the
optimal solution for the after-tax rollover from the pension as
subsequent earnings would not be taxed. If you roll the
after-tax into an IRA, you create the cost basis but subsequent
earnings have no cost basis.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Alan wrote:

- quote -

Most 401(k)s will not accept post tax money. Are you suggesting that
when one rolls a 401(k) into an IRA, that they lose the chance to roll
back into any 401(k) as they have post tax money?
I don't mean to present a tautological argument, it come down to the
process of transferring IRA money into the 401(k). It's my understanding
that in this case it's permitted to transfer *only* the pretax funds,
thus my proposal.
Joe

--
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JoeTaxpayer wrote:
- quote -

are handled differently than distributions from a qualified plan.
When you have a plan that has a cost basis because of after-tax
contributions, the plan has to keep them separate. When you
perform a rollover from such a plan, you can designate that the
after tax amounts be included or not be included in the rollover.

When you have an IRA that has a cost basis, distributions are
handled differently. Each distribution whether it be a rollover
or a direct transfer has a pro rata portion of the pre and post
tax amounts. I don't believe you have the option to designate
that an IRA distribution only have pre-tax or post-tax funds.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Alan wrote:
- quote -

expire with a bunch of other pension stuff at year-end 2010. PPA
2006 made the provisions permanent.

--
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Steve Pope wrote:
- quote -


Go to the following link and you can look at a rollover chart by
clicking on the link in that page.
http://www.phoenixwm.phl.com/html/taxlaw/page2.html

--
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Steve Pope wrote:
- quote -

Steve, you have $200K in IRAs, $100K is post tax (reflected on 8606
forms) and $100K is pretax. If you were to convert money to Roth, you
must pay tax on the pro-rated pre-tax amount, 50% in this example.
But, if you follow my plan, you transfer the $100K pretax amount into
the 401(k), and all converted funds are converted to Roth with no tax
due at all. Does this clarify, or were you questioning a different
aspect of my approach?

Joe

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

JoeTaxpayer <JoeTaxpayer[at]comcast.net> wrote:

- quote -

I am not seeing the point here. One can only transfer funds
that are already in a retirement plan or IRA into the 401(k), true?

It is correct that some 401(k)'s have as investment options commingled
funds which have lower fees than similar mutual funds. This is
because the commingled funds do not have to track capital gainstand
similar tax events. But we're talking a fraction of a percent or so.

Steve

--
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Alan wrote:

- quote -

Great site you linked to. The tab for 'Individuals' goes to this
specific issue, the others discuss the other aspect of EGTRRA.

Back to this topic - If one is employed, with a 401(k) plan that allows
incoming transfers, *and* the offering is acceptable, one has the unique
opportunity to game the system. Transfer all funds that are not the post
tax 8606-tracked funds into the 401(k). Now all IRA funds are post tax.
One can convert it all to Roth in 2010 regardless of income, with no tax
due.

(note - if the 401(k) has fees that are above some X%, the benefit of
this is quickly wiped out. Some plan's S&P index have fees lower than
I've seen in any ETF or Index fund.)

Joe
www.blog.joetaxpayer.com

--
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Alan <sfcnm-mtm[at]yahoo.com> wrote:

- quote -

Okay, I had heard of this, but I wasn't sure I had it straight.
Per this 2001 revision, one can transfer from any conventional IRA
(formed from deductible contributions) into the self-employed 401(a)?
(This seems to be what is stated at the top of page 7 of the PDF
document in the above link.)

Solo 401(k) plans are not mentioned; can these also be the target
of such a rollover? (They may not have existed yet in 2001.)

This would vastly simplify things, as well as giving you a chance
to protect more of your money. (Although, tort law doesn't permit
creating a trust after the fact, so it may not protect these
assets in bankruptcy if they are assets rolled over after the
liability was incurred.)

Steve

--
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Arthur Kamlet wrote:
- quote -

BAPCA (the bankruptcy act of '05) gives full protection to
contributory IRAs that are <= $1M from creditors in a bankruptcy
filing. Rollover IRAs, SEP-IRAs & SIMPLE IRAs have no limit.

Qualified retirement plans are covered by ERISA and are shielded
from creditors not just in a bankruptcy filings. ERISA protects
those plans from other judgments.

--
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Steve Pope wrote:
- quote -

EGTRRA 2001. It made portability almost universal.
http://www.us.kpmg.com/microsite/tax...ion/index.html

--
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In article <c74cae50-a6b8-4f7d-986c-def5dc9a4687[at]i24g2000prf.googlegroups.com> ,
gindie <gindie[at]hotmail.com> wrote:
- quote -


Correct.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 25, 5:39*pm, "Dick Watson" <littlegreenge...[at]mind-enufalready-
spring.com> wrote:
- quote -

My understanding is that the income limitations for conversions will
cease to exist for years 2010 AND AFTER. It's just that 2010 is the
only year where a conversion's resulting taxes can be spread over two
years (2011 and 2012).

Am I correct?

--
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Arthur Kamlet <-To[at]panix.com> wrote:

- quote -

Good point. (Actually non-qualified plans cannot be attached
either. That is why O.J. Simpson could never be made to pay
out on a civil judgement -- everything he's got is deferred
compensation.)

Steve

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >