Rollover

  1. You have chosen to ignore posts from dehcpa. Show dehcpa's posts

    Rollover

    Taxpayer has been receiving a  monthly pension for years, and the company realized that they were underpaying and issued a check for $32K.  They also increased the future monthly payments to the correct amount.  Taxpayer wants to rollover the $32K into an IRA and defer taxes.  I'm not so sure they can with this type of pension.  Any thoughts?  Thank you.

     
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    Re: Rollover

    In response to dehcpa's comment:
    [QUOTE]

    Taxpayer has been receiving a  monthly pension for years, and the company realized that they were underpaying and issued a check for $32K.  They also increased the future monthly payments to the correct amount.  Taxpayer wants to rollover the $32K into an IRA and defer taxes.  I'm not so sure they can with this type of pension.  Any thoughts?  Thank you.

     

    [/QUOTE]

    Dear dehcpa:

    Rollovers of required distributions are not permitted.  The Congress permitted the deferral of income recognition until retirement age and then required that distributions occur regularly and in minimum amounts so that the distributions will both support the account owner and be subjected to the taxes that have been deferred during the funding period.

    Hope this helps in preparing your returns!

     

    Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal

    Katz, Nannis + Solomon, P.C.

     

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