IRA Plans

It depends on what you invest in.

A Roth IRA is not a particular type of investment. You can use a Roth IRA to invest in bank accounts (CDs), stocks, bonds, mutual funds, and a lot of other more exotic investments. The rate of return you get depends on the investment you choose.

Distributions from a traditional ("regular") IRA are taxable unless part of the distribution comes from a non-deductible contribution or a rollover of after-tax money. So you will pay tax when you take money out of the IRA, unless you can establish that the deceased person had after-tax money in the IRA. You may want to approach the executor of the estate to see if the tax records of the deceased reflect any after-tax (non-deductible) contributions. If you are concerned with what happens to your own IRA after you die, consider making your tax records available so that your beneficiary can easily find them.

Distributions from an inherited Roth IRA are not taxable if the Roth IRA has been in existence for at least 5 years at the time the distribution is taken. If the IRA has not been in existence for 5 years, only distributions of the earnings are taxable. Distributions of contributions are not taxable. And the regular ordering rules apply: Any distributions are considered to have come from contributions before earnings, so even if you inherit a relatively new Roth IRA, you can try to stretch out the distributions so that you take out the earnings after 5 years. Again, you would need tax records of the deceased to determine whether the IRA is at least 5 years old and if it is less than five years old to determine how much is contributions and how much is earnings.

Most firms would require a distribution form to close out/cash an IRA. If you are transferring it directly to another firm, then you would need the contra firms paperwork (filled out by receiving firm).

The contribution limits are the same for 2008 and 2009:

$5000 if you are under 50 or $6000 if you are 50 or over

MINUS

the amount you contributed to a traditional IRA.

But, you may not contribute more than the amount of your taxable compensation income (which includes taxable wages, net self-employment, and alimony received).

Note that it is too late to make a 2008 IRA or Roth IRA contribution now.

Yes, this can be done.

Typically, the account-owner simply opens a new Roth account and requests the custodian to move the funds at the request of the traditional IRA owner.

Penalties will generally not apply, however, federal and state income taxes may generally be due at the account-owner's individual marginal tax rate. All amounts converted from the traditional IRA to the Roth IRA will show up as ordinary income on the account-owner's 1040 in the year of conversion.

Yes, no RMD is required to be taken for 2009. If it was a "first time" RMD for 2008 for cind. that just reach 70 1/2 in 2008, then that would of had to be taken by the deadline of 4-1-09.

It is allowed by some 401k, but not in any IRAs.

However, there is one provision in the IRA law that some people say lets you take out a very short term loan: You are allowed to take money out of your IRA and then return it within 60 days to the same or another IRA. So if you need a loan for less than 60 days, this is a way to do it.

This provision was put into the law to allow you to switch money between different IRA accounts, but it's OK if you just put the money back into the same IRA.

If you do this, remember that you have to wait a full year before you can do it again. And remember there are absolutely no extensions on the deadline. If you miss it by just one day, you are out of luck. And if your bank or brokerage is closed for a holiday, too bad.

If you are referring to the Minimum Required Distribution from a traditional IRA or 401k, the answer is no.

no simply i say i cant close ...........

Yes. No taxes are due on the accumulation until it is distributed from the IRA.

(There are a few arcane cases where tax may be due: A disqualifying transaction, a failure to take a required minimum distribution, or if UBIT applies.)

Federal withholding from IRA distributions is optional. Some states have mandatory withholding.

Your federal withholding should be enough so that at the end of the year the total tax that has been withheld from all payments, including your salary, pension, Social security, etc totals at least the lesser of:

1) 90% of the tax due for the year.

2) 100% of the tax due for the previous year (110% if the previous year's AGI was more than $150,000 or if you were married filing separately and your AGI was more than $75,000).

You can choose whichever is less.

Note that option 1) requires being able to predict your tax for the year, whereas option 2 always works.

So for example, if you are taking a lump sum distribution in 2009 and you think your total federal tax for 2009 will be $10,000 but your total tax for 2008 was $1,000, as long as the total taxes you have withheld from all sources is $1000, you will be safe from any penalty for underpayment.

Note that the above is how much you should withhold in order to avoid a penalty for underpayment of taxes. It is not the actual amount that you owe. The actual amount that you owe is calculated at the end of the year when you fill out your Form 1040. If you just have the minimum withheld, there is a good chance you will owe more tax at the end of the year. I cannot tell you how much tax you will owe at the end of the year, but you may be able to estimate it using this calculator:

http://www.dinkytown.net/java/Tax1040.html

Most states follow the same rules as the federal government for minimum tax payments, but you will have to check your state's specific tax rules.

You are not required to take a lump sum dist. at age 62 (RMD start at 70 1/2).

For contributions, no, unless you exceeded one of the annual maximums.

For distributions, yes, you should have gotten a 1099-R.

I think you misunderstand what an IRA is.

There are two types of IRAs. One is a Roth IRA, and the other is just an IRA. The second one is often called a Traditional IRA (TIRA) to make it clear you are not talking about a Roth IRA.

Either type of IRA is a retirement account. You can open either at a bank, brokerage house, mutual fund company, or insurance company.

You can open either type of IRA at a bank. One of your investment choices at the bank will be a Certificate of Deposit (CD). A CD is a type of savings account that pays higher interest because you promise to leave your money in it for a long time.

If you want to invest your retirement money in a CD, you can go to a bank and tell them you want to open a Roth IRA account or a TIRA account. Then you tell them that you want to invest the money in a CD. And then they will put a CD into either your Roth IRA or TIRA account. You can refer to a CD that is in a Roth or TIRA account as an "IRA CD" if you wish.

So you don't have to choose between a Roth IRA or an IRA CD. You can have a CD in your Roth IRA if that is what you really want.

Of course, you can open either type of IRA account at a brokerage house. There you can invest in stocks, mutual funds, bonds, etc in either type of account if that is what you wish. Or you can open either type of IRA account at an insurance company where you can invest in an annuity.

I don't see why not. It's your money and you can do whatever you want with it. It will not affect your Profit Sharing.

No. IRA distributions may be subject to income tax only.

No. Income averaging was removed from the Tax Code in 1986, except for farmers.

$2,000.

If the CD is already in an IRA account, you can transfer it to any other IRA account that will accept your CD. However, unless you have a brokered CD, it ordinarily can't be transfered to another bank or to a brokerage. If you have an ordinary CD that you bought at a bank, it has to stay in the same bank.

If the CD is not in an IRA account, you cannot put it into an IRA account. Only cash (including checks, money orders, and electronic funds transfers) can be contributed to an IRA. If you are eligible to put money into an IRA, you will have to wait until the CD matures and cash it out or cash it out early and pay a penalty. Then you can use the cash to make a contribution to an IRA subject to the usual annual limits on contributions.

Yes, you can do this under current IRS rules. The rules behind this are fairly complicated, but it's allowable (maybe the correct term is that it's not disallowed).

Not unless you are a professional trader.

If you are a professional trader, you would know it.

The best option usually is to do a direct roll-over from the 401k to an IRA. You can get forms from your 401k company or the new financial institution where you want to put your money. If you do not already have an IRA, the 401k company can help you set up an account.

the IRS does not recognize a Canadian registered retirement account as a IRA account better to leave it in Canada or contribute directly to the IRA from Canada

You have to go to a securities licensed financial expert to set up an IRA :banks , financial advisers investment firms , etc.