Roth IRA Answer Book, Ninth Edition

1. Introduction to Roth IRAs

• Establishing a Roth IRA
• Model Roth IRA Documents
• Records Retention
• Revoking a Roth IRA
• Prototype Roth IRA Documents
• Prohibited Transactions and Related Definitions
• Miscellaneous Rules

2. Annual Contributions to a Roth IRA

• Limits on Annual Contributions
• Phaseout Rules
• Age and Plan Participant Status
• Annual Contribution Deadline
• Excess Contributions
• Tax Credits for Contributions
• Deemed Roth IRAs
• Payroll Deduction Roth IRA Programs

3. Conversion, Contribution Recharacterization, and Rollovers

• Conversion of Traditional IRA to Roth IRA
• Contribution Recharacterization
• SEP IRA/SIMPLE IRA
• Rollovers
• Deemed IRAs
• Rollover of Military Death Gratuities and SGLI Payments
• Rollover of Exxon Valdez Settlement
• Qualified Reservist Distribution Repayments
• Qualified Hurricane Distribution Repayments
• Qualified Recovery Assistance Distributions Repayments (Kansas Disaster Area)
• Qualified Disaster Distributions for the Purchase or Construction of a Main Home (Kansas Disaster Area)
• Qualified Disaster Recovery Assistance Distribution Repayments (Midwestern Disaster Areas)
• Qualified Disaster Distributions for the Purchase or Construction of a Main Home (Midwestern Disaster Areas) Service in Combat Zone or Contingency Operation
• Presidentially Declared Disasters, Terrorist, or Military Action
• Rollover of Airline Payments

4. Voluntary Distributions

• Qualified Distributions
• Nonqualified Distributions
• Five-Year Exclusion Periods
• 10 Percent Premature Distribution Penalty
• Withholding
• Transfers Between Roth IRAs
• Transfers Incident to Divorce
• Deductions for Losses
• Demutualization
• Deemed Roth IRAs
• Qualified Roth IRA Contribution Programs (Designated Roth Contributions)

5. Required Minimum Distributions

• Five-Year Rule
• Beneficiaries
• Subsequent Beneficiaries
• Penalties
• Tax Matters
• Deemed Roth IRAs

6. Financial Planning

• The Basic Considerations
• AGI/MAGI
• Conversion Considerations
• State Law Considerations
• Inherited IRA
• Life Insurance to Pay Estate Tax

7. Roth IRA Trusts

• Drafting Considerations
• Roth IRA Trust Distribution Rules
• Generation-Skipping Trust
• Funding Clauses
• Disclaimers
• Taxation
• Permissible Transfer
• QTIPing a Roth IRA
• Countable Beneficiaries

8. Beneficiary Designations

• Classifying Retirement Plans
• Making a Beneficiary Designation
• Family Rights that Restrain a Beneficiary Designation
• How Divorce Might Affect a Beneficiary Designation
• Other Events that Might Affect a Beneficiary Designation
• Disclaimers
• Giving Advice About Making a Beneficiary Designation
• Common Mistakes

9. Required Reporting for Roth IRAs

• Reporting Roth IRA Contributions on Form 5498
• Information to BeProvided to IRA Owner (or Beneficiary)
• Deceased IRA Owner
• Recharacterization Contributions
• Revoked Roth IRAs
• Penalties
• Records Retention
• Reporting Roth IRA Distributions on Form 1099-R
• When Form 1099-R Is Not Used
• Conversion
• Recharacterization
• Revoked Roth IRAs
• Correcting 1099-R Forms
• Penalties
• Merger of Trustees and Custodians
• Records Retention
• Reporting Distributions and Conversions on Form 8606

10. Designated Roth Contribution Programs

• Contributions to Designated Roth Accounts
• Designated Roth Accounts
• Distributions from Designated Roth Accounts
• Rollovers of Designated Roth Contributions
• Excess Contributions
• Reporting and Recordkeeping Requirements for Designated Roth Accounts
• In-Plan Roth Rollovers

Appendices

Traditional IRA and Roth IRA Comparison Chart for 2013

Traditional IRA Deduction Restrictions for Active Participants

Restrictions on Roth IRA Contributions for High-Income Taxpayers

Roth IRA Distribution Taxation

Traditional/Roth IRA Eligibility for 2013—married

Traditional/Roth IRA Eligibility for 2013—single

Roth IRA Distribution Flowchart

Roth IRA Summary

Annual Roth IRA Contribution Limits

Annotated Extracts from Code Section 408A (As of June 1, 2013)

Code Section 408A: Roth IRAs

Modified Adjusted Gross Income (MAGI) Phaseout Chart

Modified Adjusted Gross Income (MAGI) Phaseout Chart

Extracts from Treasury Regulations (As of June 1, 2013)

Preamble, Final Treasury Regulations Section 1.408A

Preamble, Final Treasury Regulations Section 1.408A-4

Treasury Regulations Sections 1.408A-1 through 1.408A-10

Notice 2010-84, 2010-51 I.R.B. 872

Notice 2009-75, 2009-39 I.R.B. 436

Revenue Procedure 2006-13, 2006-3 I.R.B. 315

Notice 2007-7, Section IX, 2007-5 I.R.B. 395

Notice 2006-44, 2006-20 I.R.B. 889

Announcement 2008-44, 2008-20 I.R.B. 892

Announcement 2007-55, 2007-1 I.R.B. 1384

Notice 2008-30, 2008-12 I.R.B. 638

Notice 2004-8, 2004-4 I.R.B. 333

Pension and Welfare Benefits Administration (PWBA) Opinion Letter

Roth IRA List of Required Modifications and Information Package

Cash or Deferred Arrangement (CODA) List of Required Modifications and Information Package

Participant Rollover Chart

Portability Options for Inherited Assets from Employer Plans, Traditional IRAs and Roth IRAs

Beneficiary Rollover Chart

Required Minimum Distributions upon Death of a Beneficiary Under Code Section 401(a)(9)

Distribution to Beneficiary Chart

Employee Benefit Limits