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Article: New rules permit plan balance shift; IRS has created opportunities for beneficiaries to convert to Roth IRAs, with restrictions.(IRA Alert)
- Article from:
- Investment News
- Article date:
- March 31, 2008
CopyrightCOPYRIGHT 2008 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Ed Slott
Providing guidance on the provision of the Pension Protection Act of 2006 that now allows a plan participant to convert a plan balance directly to a Roth IRA, the Internal Revenue Service has issued a set of new rules (Notice 2008-30).
In some cases, after-tax funds from 401(k), 403(b) and 457 plans can be converted to a Roth individual retirement account tax-free, as long as only those funds are converted and the remaining plan funds are rolled into a traditional IRA.
The Roth conversion eligibility rules still apply, meaning that a taxpayer's modified adjusted gross income cannot exceed $100,000, whether filing a joint or a ...