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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: 401Roll/ Date: 9/3/1999 3:40 PM
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Cheryl writes:

<<Ok, here's the situation. My husband and I have a small S Corp and have initiated a Qualified Profit Sharing Plan. We also use a leasing company for employees (which has a 401). We are changing leasing companies and have funds for rollover.

I could a: roll to new 401; b: roll funds to Profit Sharing program which is allowed but not employee contributions and we are the trustees; or c. roll funds to traditional IRA which we could contribute to but probably would not be tax deferred because of AGI (nightmare bookkeeping). Roth is not an option right now our tax liability is too large and our cash is too small.

I think the P/S is best because we have control and the possibilty of additional contributions taxed deferred (by the company)are possible. I would much rather keep the money separate but I think this is the best solution.>>


I'm afraid I can't track the source of the funds you have available for rollover based on your description. Is this money you and/or your husband have on deposit in an old 401k or other defined contribution plan? If so, and if the accounts are $5K or greater, you can leave the money in that plan. If so, and if the amounts are less than $5K, you can transfer them to their own conduit (or rollover) IRA or transfer them to your profit sharing plan. Either transfer would work, so the choice is up to you.

If I'm not understanding correctly here, please clarify what the problem is on which you wish us to comment.

Regards..Pixy
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