Ask A Question
Ask a Finance Question, Get an Answer ASAP!
Published on: August 30, 2013
Roth IRA Rules
What is a Roth IRA?
is a type of Individual
). It starts completely non-qualified as far as tax is concerned. Any amount that an individual may earn in a Roth IRA may also be considered to be non-qualified. This means once all the funds that a person earns in a Roth IRA are removed during retirement, it will not be taxed by the federal government. Given below are questions that have been answered by the thousands of Experts about Roth IRA.
Can a Roth IRA be converted to a revocable trust?
It may not be possible to convert a Roth IRA into a
. However, one may make the revocable trust the beneficiary of the Roth IRA. If the Roth IRA meets the 5 year contributions at the time of the individual’s death, all the money that goes into the trust from the IRA account will become tax free.
What rules would a non spouse beneficiary of a Roth IRA have to follow while inheriting benefits?
If a non spouse beneficiary inherits an individual’s Roth IRA, the non spouse may have to follow certain rules. First of all, the inheritance will be subjected to estate tax if its value is not under the minimum taxable inheritance for that particular year. The beneficiary many not combine the IRA with their own IRA or make any contributions to it. The individual may either receive the IRA amount all together before December 31st of that year or they may receive it in parts over a period of their lifetime. If the beneficiary chooses the second option, the distribution will stop on the death of the beneficiary and be passed onto the next one. The beneficiary may not withdraw from the account for at least a period of 5 years after it was established for it to be exempt from
Can a person’s IRA account own assets or loan money to someone?
It may not be possible for an IRA account to own assets to which the individual may have direct access. The individual may also not be able to loan money to anybody from the IRA.
What income tax rules apply to Roth IRAs?
A Roth IRA may have been established for a period of minimum 5 years before it is withdrawn in order for it to be tax free. The money that an individual earns from it would become tax free on the first day of the fifth taxable year from the date of its establishment. If the earnings are withdrawn before 5 years for a reason other than premature death, the individual may also have to pay a penalty of 10% besides the income tax. However, if the money is withdrawn due to the IRA owner’s premature death, the penalty will not be levied.
Can people contribute to a traditional IRA and then convert it to a Roth IRA?
An individual may be able to contribute to a
account and convert it to a Roth IRA. He/she may not be required to pay any penalty either.
There are various kinds of retirement benefits that are available to people. Depending on your age and situations, you must be able to decide which of these benefits best suits your needs. However, you need to have at least the basic knowledge about these benefits so that you are able to choose between the various options available. Some of the features of these benefits may sometimes overlap and make it confusing for you to understand. In such situations, you may consult an Expert and get your questions and doubts cleared.
Experts are Online Right Now
Ask Your Question Now
Ask a Finance question
Type Your Finance Question Here...
In The News
How It Works:
Ask an Expert
Get a Professional Answer
Ask Followup Questions
100% Satisfaction Guarantee
Ask a Financial Professional
Get a Professional Answer. 100% Satisfaction Guaranteed.
Financial Professionals are Online Now
Type Your Finance Question Here...
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not AskALawyerOnCall; AskALawyerOnCall is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by AskALawyerOnCall regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. AskALawyerOnCall is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.
Become a Professional
Terms of Service
Privacy & Security
© 2003-2013 JustAnswer LLC