Posted by Bill Humphrey on Fri, Apr 02, 2010
Looking to lock in the current income tax rates and start generating tax-free income for your retirement income via a 2010 Roth conversion but discover you have assets that most IRAs won't accept? We can help!
We are hearing from numerous retirement investors who directed their Qualified Plans to purchase a wide variety of non-traditional investments, but are meeting resistance in converting those assets to a Roth IRA. These Qualified Plans run the gamut of available types, from defined contribution plans such as 401k plans, to profit-sharing plans, to money purchase plans, to defined benefit plans. Many of these plans have accumulated significant assets, including real estate. In order to take advantage of the 2010 Roth conversion opportunity, these assets must be distributed from the plan to a Roth.
Entrust New Direction focuses on this particular process. Recently, many individuals have come to us because they want to move assets out of company plans and into IRAs as they reach retirement age. Unlike most IRA providers, we are happy to help get those assets moved.
With the 2010 changes, more individuals are looking to move their assets to a Roth IRA, thus locking in the tax rates at the current (some say low) tax rates, while at the same time getting tax-free income for the future. If you find yourself wanting to convert non-traditional plan assets to a Roth in 2010 and lock in the current tax rates, we can help!
The conversion process:
- Open a new Self Directed Roth IRA with Entrust
- Determine the value of the asset(s) and initiate a direct rollover from the old plan to the new Roth
- Include the value of the asset(s) rolled on their individual tax return either in 2010 OR ½ in 2011 and ½ in 2012. (You will receive a 1099R with the value listed)
- The asset(s) would then be owned by the Roth IRA and would be tax-free from that point forward.
A Self-Directed Roth IRA is only different from any other Roth in that it can hold a much wider variety of assets.
Consult with your tax advisor for what the tax implications are and ask your plan administrator what your options are for moving assets out. If either of your experts or you have any questions, we would be happy to share the rules and details. Call us today to get the process started.
Posted by John Sheflin on Fri, May 15, 2009
2010 is the magical year of rule breaking.
The Roth IRA is quite possibly the best deal the federal government has ever offered tax payers. But until 2010, this fabulous deal was only offered to people earning less than (approximately) $100,000. Not so in 2010. The federal government has announced a suspension of the rules for 2010.
The Roth IRA is like the pot of gold at the end of the rainbow. You can rollover any amount of money from a traditional IRA or 401(k) into a Roth IRA, and every dollar you earn with that money is TAX FREE.
The federal government really wants people to convert to Roth IRAs in 2010. There is one more reason to convert - you can pay the taxes from the conversion in equal amounts in 2011 and 2012. This means you get a no-interest loan for 2 years.
Besides earning tax-free dollars for you, the Roth IRA is one of the best vehicles for passing money to your heir.
See more information and sign up for an email list which we'll use to remind you to open a Roth IRA in 2010.