IRAs - Contributory vs. Rollover

Question 1

What is the difference between a Contributory and a Rollover IRA?

Answer 1

A contributory IRA is any IRA that has received at least one individual contribution, even if it also contains money rolled over from a qualified retirement plan.

Question 2

How did the law changes in 1992 impact the ability to roll a contributory IRA into a qualified retirement plan?

Answer 2

It made it possible to do so. Prior to the change, only Rollover IRAs could be rolled into qualified retirement plans.

Question 3

T or F

Withdrawals from IRAs with tax basis are taxed based on the proportion of the tax basis across all of the owners IRAs (aggregation)

Answer 3

True: the rationale for withdrawal doesn’t matter (general purpose, hardship, Roth conversion, etc)

Question 4

As of 1992, Federal law allowed contributory IRAs to be rolled into qualified retirement plans. Does this mean that all qualified plans accept too-ins?

Answer 4

No, each plan determines this for itself (most seem to)