SEP IRA

Archive for October, 2007

Question: 401k rollover questions?

I have the following retirement accounts; Traditional, Roth, SEP IRA, as well as 401k account from my previous employer. My question is;
1. If I rollover my 401K to SEP-IRA, can I still contribute 20% of my self-employment income to SEP-IRA? (Does my rollover counts towards this limit?) Also, if I do the roll-over, can I deduct the roll-over amount when I file my taxes next year?
2. What if I roll-over my traditional IRA to SEP-IRA?

Please let me know. Thanks!

Answer: rollovers do not count as contributions. they are transfers. You can’t deduct them no matter what you do. Only thing that happens is that you declare them on your 1040 (line 16a) and then declare them to be non-taxable on 1040 (line 16b). At that point the govt computers scan the databasefor rollover institutions (receiving institutions notify IRS of amount and SSN) and the IRS will note any differences and flag for possible audit if they don’t match.

Answer is same for #1 and #2

IRA Rollover Roth

Question: I own 1000 shares in GM. I bought them at $10/share (ouch!). They are in my SEP-IRA.?

I would like to know:
1) What will happen to my shares if GM declares bankruptcy?
2) If it re-emerges from bankruptcy, and issues new stocks under a new name, what will happen to my stocks under the Obama plan?
3) If the stocks go to Zero, and new shares under a new name not given to old share holders, when can I deduct the losses on my taxes as the shares are in my SEP-IRA.
Thanks

Answer: Why would you wait for the company to go bankrupt?
(y
That company cannot last. They don’t make money. It is not possible.

Sell now, and save your money.

Can I have multiple properly structured Tax Free Income Retirement Plan