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Investing/Strategies / Retirement Investing
|Subject: Re: Technical IRA Questions||Date: 2/18/2011 5:39 PM|
|Author: BruceCM||Number: 68484 of 78299|
You are a bit confused on how an IRA is set up and rules governing withdrawals. Let me go through and point out a few things so that you might better understand your situation.
I have a Rollover IRA in my name, and a Traditional IRA in my wife's
A rollover IRA is a Traditional IRA (TIRA)...there is no difference.
And you could not hold an IRA in anyone's name other than your own, although each IRA should have a named beneficiary and a contingent beneficiary.
I took a non-qualified distribution of the entire account balance
I assume you mean you took a withdrawal prior to age 59.5? If so, this is really not "non-qualified", as would be the case of a Roth IRA withdrawal...its just an early withdrawal that will be subject to a 10% penalty on the amount you have to include in your gross income on your tax return for that year.
the balance left following the non-qualified distribution was $0.02 which has sat untouched in the account since 2004. I would have filed a Form 8606 in 2004 if required (I'd have to pull my taxes to verify, and don't have access right now); but definitely have filed anything on this account since then.
Why do you feel you need to have filed a form 8606? Did any of your IRAs have basis in them prior to the withdrawal? If so, then you would need to file an 8606. If not, you wouldn't
Based on the previous activity in the account, is there anything special I need to do? Am I delinquent on 6 years of Form 8606, or since the account balance has been $0.00 (or $0.21) since 2004, with no activity, is it alright? Do I have any basis in the account, or since the last activity was a complete distribution and the current available balance is $0.00, is it just as good as starting from a new account, and I should just keep my records moving forward?
Whether you elect to 'start over' or not has no bearing on contribution limits, withdrawal rules, tax deductiblity of your annual TIRA contributions or anything else I can think of...its really a state-of-mind you have that may help you to make disciplined contributions and leave the $$ in the IRA alone until requirement.
With the Rollover account in my name, I think I need to simply close that one