Search found 10 matches

by ydnar
Mon Apr 11, 2011 8:12 am
Forum: Personal Investments
Topic: Admiral shares at non-Vanguard brokerages: share info
Replies: 28
Views: 16419

Transfer of IRA containing Admirality Funds to Fidelity

In an effort to consolidate most of my IRA funds to a single investment company, I recently inquired if I could maintain my Wellington Admiral status when the funds were moved. I was told that Vanguard's rules required that the funds be converted to Investor funds (higher mgt fee) for the transfer, and they could then be converted to Admiral funds after the transfer was complete. Well, the funds were transferred and surprise, surprise...They could not be changed back to Admiral funds. My Fidelity account executive was very apologetic and offered to transfer them back. I have done nothing so far and the fee differences are not a tremendous amount of money, but this was the kind of deal that you could see coming if you were over 30 and had be...
by ydnar
Fri Apr 09, 2010 5:57 pm
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

Phone Call From IRS Retirement Advice Center

I never received the written response from the IRS that I had requested, but I did get a phone call a while back exactly reversing the position they had taken last year when I originally asked. My initial post describes what I did after receiving their blessing. I can't help but smile at how crazy they make me, but guess I will do what is necessary to correct it all when they finally put out policy. The agent who called said that they were considering their position and , if they change it, will make the new guidance public. I just shake my head over the whole mess.

Randy
by ydnar
Sat Mar 13, 2010 11:56 am
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

After-tax direct rollover

I mentioned in an earlier post that I made a decision to proceed with my direct rollover based not only on Vanguard advice and articles on the subject, but also on verbal advice received from the IRS retirement site where you can email questions to the "experts". I have twice asked them for an email confirmation of their verbal guidance and the silence has been deafening. Has anyone else experience this same situation where the IRS refuses to document verbal guidance?
by ydnar
Thu Jan 07, 2010 8:06 pm
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

Redbelly,

I think that is what they are saying in a backdoor type way by saying that the portion that is counted as taxable is everything but the after tax amount. You have to assume that the normal rollover rules would apply to the remainder of pretax and earnings.

Randy
by ydnar
Thu Jan 07, 2010 6:05 pm
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

The IRS website contains information that I don't think I have seen quoted yet. It is Notice 2009-75, Rollovers from Employer Plans to Roth IRA's. Part III, Question 1, Answer 1 III. ROLLOVERS FROM AN ELIGIBLE EMPLOYER PLAN TO A ROTH IRA Q-1: What amount is included in gross income as a consequence of a rollover to a Roth IRA from an eligible employer plan (i.e., a qualified plan described in § 401(a), an annuity plan described in § 403(a), a plan described in §403(b), or a governmental § 457(b) plan)? A-1: (a) Rollovers to a Roth IRA of distributions that are not made from a designated Roth account. If an eligible rollover distribution from an eligible employer plan is rolled over to a Roth IRA and the distribution is not made from a desig...
by ydnar
Wed Jan 06, 2010 9:37 pm
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

You would owe taxes on any gains in the account, but Vanguard has isolated only the after tax contributions that will be used in the transfer...no gains.
by ydnar
Wed Jan 06, 2010 7:01 pm
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

Re: After Tax 401K Rollover to Roth IRA, Continued

[

While there is no question that you can rollover the AT funds directly to a Roth IRA from the 401k plan, you will need to determine what portion of the AT amount rolled over to the Roth will be taxed as a distribution if you also received a taxable distributions in the same year from your 401k plan that was rolled over to a traditional IRA and/or you also maintained a traditional IRA. You need to complete IRS form 8606 to determine what will be the taxable percentage of the AT funds rolled over to the Roth IRA that will be included in taxable income.[/quote]

It was my understanding that the proportionality rules don't apply to a direct 401k rollover to an IRA...ydnar
by ydnar
Wed Jan 06, 2010 10:17 am
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

No taxes withheld because they are both direct rollovers. (Traditional and Roth)
by ydnar
Tue Jan 05, 2010 6:57 pm
Forum: Personal Investments
Topic: After Tax 401K Rollover to Roth IRA, Continued
Replies: 63
Views: 41682

After Tax 401K Rollover to Roth IRA, Continued

There has been much discussion on the rolling of 401K after tax funds directly into a Roth IRA without creating a taxable event. After much study of conflicting information, I decided to ask the IRS directly and made the decision to proceed with the rollover of my Vanguard 401k into Roth and Traditional Vanguard accounts. My request to the IRS was on Dec 9, 2009, and they called me today with their answer that the after tax money could go directly into a Roth account. I am well aware of the fact that they do not stand behind their advice and can turn on you after the fact, but I figure I can always recharacterize the Roth account if necessary. Here again are the details of my situation: --62 Year Old with approximately 88000 after tax funds...
by ydnar
Wed Dec 09, 2009 6:10 pm
Forum: Investing - Theory, News & General
Topic: Rolling After-tax 401k funds directly into Roth IRA in 2010
Replies: 5
Views: 2859

Rolling After-tax 401k funds directly into Roth IRA in 2010

I have been discussing transferring after-tax funds from my 401K account with my Vanguard rep. I am considering moving only the after tax money directly into a Vanguard Roth IRA after Jan 2010 and had been previously advised that this would be no problem. I just got a call from them advising that I can still make the move but I need to consult my tax person about possible tax consequences of this move based on recent guidance that Vanguard received from the IRS in a bulletin 2009-75. Anyone else familiar with potential problems? I am 62 years old.

Thanks