Annuities 2 Flashcards
What Does QRP stand for?
Qualified Retirment Plan
What is a transfer?
tax free movement of money between similar types of IRAs
How much federal tax applies to a transfer of money between IRA accounts?
Psyche! none!
What is a roll-over?
It’s a tax-free movement asset from one Retirment plan to a different Retirment plan.
What’s the key thing to remember about rollovers?
they are reportable (i.e. a tax form is gon’ be necessary)
What is the purpose of a 1099-R?
It reports distribtuions from pensions, annuities, and retirement or profit-sharing plans, IRAs, insurance contracts, etc.
What is a 5498 for?
A tax form, it’s for reporting IRA contributions
What are the 2 types of rollovers?
Indirect and direct
Indirect Rollover
Money from a retirement plan is distributed to the individual and then rolled into an eligible plan
Also known as regular rollovers; a distribution from “A” and a contribution into “B”. Must be completed within 60 days or else there will be taxes
How many indirect rollovers legally can you do in a year?
one; that 12-month period begins on the date that the distribution is received the receiving instrument. RMD must be satisfied prior to the rollover
Direct Rollovers are used to…
Transfer retirement money to different types of retirement plan
The 20% withholding applies to direct or indirect rollovers?
Indirect only!
A Conversion is….
A reportable and taxable movement of money from an IRA type plan to a Roth (instrument “A” MUST be at least 2 years old)
What is “Qualified Rollover Contributions”?
movement of money from a 403(b) or QRP to a Roth IRA
1035 Exchanges
the movement of money into non-qualified plans (or from 1 non-qualified instrument to another non-qualified instrument)
