CHAPTER 6
ROTH IRAS
§ 6.01 Overview of Taxation of Participants in Roth IRAs
-----[1] Nontaxable Qualified Distributions
-----[2] Taxable Nonqualified Distributions
-----[3] Transfers from Regular IRAs and Certain Other Plans
-----[4] Recharacterizations of TQR Contributions
-----[5] TQR Contributions by Beneficiaries
-----[6] Nontaxable Transfers between Roth IRAs
-----[7] Income Tax Withholding
§ 6.02 Contributions to a Roth IRA
-----[1] Types of Contributions to Fund a Roth IRA
-----[2] TQR Contributions to Roth IRAs
----------[a] Taxation of TQR Contributions
---------------[i] Taxation of TQR Contributions Generally
---------------[ii] Passing a TQR Contribution from a Qualified Plan through IRAs
---------------[iii] Relative Timing of an IRA Roth Conversion and Qualified Plan Rollover
---------------[iv] TQR Contribution from a Qualified Plan with Personal Retention of Investment
---------------[v] Tracing Funds from a Qualified Plan through an IRA to a Roth IRA
---------------[vi] Special Treatment of Distributions of Employee Contributions
---------------[vii] Special Deferral of Tax on TQR Contributions Made in 2010
---------------[viii] Income Tax Withholding and Penalty for Premature Distribution
----------[b] Eligibility to Make TQR Contributions
---------------[i] Restrictions Applicable to TQR Contributions Before 2010
---------------[ii] Fewer Restrictions on TQR Contributions after 2009
---------------[iii] Failure to Satisfy Rollover Conditions
----------[c] Methods for Making TQR Contributions
---------------[i] Choice of TQR Contribution Methods
---------------[ii] Requirements for an Indirect Rollover
----------[d] Recharacterization of TQR Contributions
---------------[i] Tax Treatment of Recharacterizations of TQR Contributions
---------------[ii] Requirements for Recharacterization
---------------[iii] Grant of Additional Time for Recharacterization
--------------------[A] Requirements for Grant of Additional Time for Recharacterization
--------------------[B] Failure to Recharacterize Not Discovered
--------------------[C] Intervening Events beyond Taxpayer’s Control
--------------------[D] Unaware of Need for Recharacterization Despite Reasonable Diligence
--------------------[E] Reliance on Qualified Tax Professional
---------------[iv] Denial of Additional Time for Recharacterization
---------------[v] Subsequent Transfers of Recharacterized Funds
----------[e] TQR Contributions by Surviving Spouses and Other Beneficiaries
-----[3] Rollovers from Designated Roth Accounts
-----[4] Rollover Contributions Between Roth IRAs
----------[a] Choice of Indirect Rollover or Trustee-to-Trustee Transfer
----------[b] Requirements for an Indirect Rollover
----------[c] Only One Rollover per Year
----------[d] Rollover Available to Beneficiary Who is Surviving Spouse
-----[5] Nontaxable Rollovers of Certain Military Death Payments
§ 6.03 Tax-Free Qualified Distributions from Roth IRAs
-----[1] Qualified Distribution Defined
-----[2] Excess Contributions
-----[3] No Carryover of Five-Year Period from a Designated Roth Account
§ 6.04 Taxation of Nonqualified Distributions from Roth IRAs
-----[1] Nonqualified Distributions Defined
-----[2] Classification and Taxation of Components of Nonqualified Distributions
-----[3] The Ten Percent Penalty Tax
----------[a] Application of the Ten Percent Penalty Tax
----------[b] The Age or Disability Exception to the Ten Percent Penalty Tax
----------[c] The Substantially Equal Payments Exception to the Ten Percent Penalty Tax
----------[d] Other Exceptions to the Ten Percent Penalty Tax
----------[e] Special Exception for Previously Taxed Components
----------[f] Examples Illustrating the Taxation of Nonqualified Distributions
§ 6.05 Illustrations of Long-Term Tax Savings Afforded by Roth IRAs
-----[1] Long-Term Tax Savings Due to Tax Rate Differential
-----[2] Long-Term Tax Savings Due to Transfer of High Income Assets
-----[3] Transfers to Roth IRAs When Funds Not Needed in Retirement
§ 6.06 Transfers of Roth IRAs Incident to Divorce or Legal Separation
§ 6.07 Surviving Spouse’s Election to Become the Owner of a Roth IRA
§ 6.08 Inherited Roth IRAs
§ 6.09 Tax Withholding from Distributions Made by Roth IRAs
-----[1] Withholding Tax on Nonqualified Distributions from Roth IRAs
-----[2] Election to Eliminate Withholding Tax for Nonqualified Distributions
-----[3] TQR Contributions to Roth IRAs
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ROTH IRAS
§ 6.01 Overview of Taxation of Participants in Roth IRAs
-----[1] Nontaxable Qualified Distributions
-----[2] Taxable Nonqualified Distributions
-----[3] Transfers from Regular IRAs and Certain Other Plans
-----[4] Recharacterizations of TQR Contributions
-----[5] TQR Contributions by Beneficiaries
-----[6] Nontaxable Transfers between Roth IRAs
-----[7] Income Tax Withholding
§ 6.02 Contributions to a Roth IRA
-----[1] Types of Contributions to Fund a Roth IRA
-----[2] TQR Contributions to Roth IRAs
----------[a] Taxation of TQR Contributions
---------------[i] Taxation of TQR Contributions Generally
---------------[ii] Passing a TQR Contribution from a Qualified Plan through IRAs
---------------[iii] Relative Timing of an IRA Roth Conversion and Qualified Plan Rollover
---------------[iv] TQR Contribution from a Qualified Plan with Personal Retention of Investment
---------------[v] Tracing Funds from a Qualified Plan through an IRA to a Roth IRA
---------------[vi] Special Treatment of Distributions of Employee Contributions
---------------[vii] Special Deferral of Tax on TQR Contributions Made in 2010
---------------[viii] Income Tax Withholding and Penalty for Premature Distribution
----------[b] Eligibility to Make TQR Contributions
---------------[i] Restrictions Applicable to TQR Contributions Before 2010
---------------[ii] Fewer Restrictions on TQR Contributions after 2009
---------------[iii] Failure to Satisfy Rollover Conditions
----------[c] Methods for Making TQR Contributions
---------------[i] Choice of TQR Contribution Methods
---------------[ii] Requirements for an Indirect Rollover
----------[d] Recharacterization of TQR Contributions
---------------[i] Tax Treatment of Recharacterizations of TQR Contributions
---------------[ii] Requirements for Recharacterization
---------------[iii] Grant of Additional Time for Recharacterization
--------------------[A] Requirements for Grant of Additional Time for Recharacterization
--------------------[B] Failure to Recharacterize Not Discovered
--------------------[C] Intervening Events beyond Taxpayer’s Control
--------------------[D] Unaware of Need for Recharacterization Despite Reasonable Diligence
--------------------[E] Reliance on Qualified Tax Professional
---------------[iv] Denial of Additional Time for Recharacterization
---------------[v] Subsequent Transfers of Recharacterized Funds
----------[e] TQR Contributions by Surviving Spouses and Other Beneficiaries
-----[3] Rollovers from Designated Roth Accounts
-----[4] Rollover Contributions Between Roth IRAs
----------[a] Choice of Indirect Rollover or Trustee-to-Trustee Transfer
----------[b] Requirements for an Indirect Rollover
----------[c] Only One Rollover per Year
----------[d] Rollover Available to Beneficiary Who is Surviving Spouse
-----[5] Nontaxable Rollovers of Certain Military Death Payments
§ 6.03 Tax-Free Qualified Distributions from Roth IRAs
-----[1] Qualified Distribution Defined
-----[2] Excess Contributions
-----[3] No Carryover of Five-Year Period from a Designated Roth Account
§ 6.04 Taxation of Nonqualified Distributions from Roth IRAs
-----[1] Nonqualified Distributions Defined
-----[2] Classification and Taxation of Components of Nonqualified Distributions
-----[3] The Ten Percent Penalty Tax
----------[a] Application of the Ten Percent Penalty Tax
----------[b] The Age or Disability Exception to the Ten Percent Penalty Tax
----------[c] The Substantially Equal Payments Exception to the Ten Percent Penalty Tax
----------[d] Other Exceptions to the Ten Percent Penalty Tax
----------[e] Special Exception for Previously Taxed Components
----------[f] Examples Illustrating the Taxation of Nonqualified Distributions
§ 6.05 Illustrations of Long-Term Tax Savings Afforded by Roth IRAs
-----[1] Long-Term Tax Savings Due to Tax Rate Differential
-----[2] Long-Term Tax Savings Due to Transfer of High Income Assets
-----[3] Transfers to Roth IRAs When Funds Not Needed in Retirement
§ 6.06 Transfers of Roth IRAs Incident to Divorce or Legal Separation
§ 6.07 Surviving Spouse’s Election to Become the Owner of a Roth IRA
§ 6.08 Inherited Roth IRAs
§ 6.09 Tax Withholding from Distributions Made by Roth IRAs
-----[1] Withholding Tax on Nonqualified Distributions from Roth IRAs
-----[2] Election to Eliminate Withholding Tax for Nonqualified Distributions
-----[3] TQR Contributions to Roth IRAs
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| Copyright © 2005-2010 by Vorris J. Blankenship All Rights Reserved |
The author intends that this website provide accurate and authoritative information on the subject
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
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