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Has anyone seen/done this, and is there any recourse?
I transferred a partial cash amt. from one broker to another inside an ira. Waterhouse was the receiver, and I just Fri eve noticed that they did not set it up as an IRA. I have copies of papers, clearly stated to be an IRA transfer. The 60 days have passed. I have traded stock in the account, because I assumed they had set it up correctly. My spouse has converted to a Roth and now, if this is unable to be corrected, I will have to uncovert in order to save some $ tax. The sickest part is that if they wont make the entries to make it an IRA I lose also the ability to trade inside an IRA, and will have to redeposit the funds gradually over many years to get it all back into a Roth.
Sorry long winded...but have to wait till Tues to talk to WH and see what we can do. going crazy meanwhile, and the boards were down over wkend...help.
thanks in advance.
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[[ Has anyone seen/done this, and is there any recourse?]]

I always HATE it when a post starts out this way...

[[ I transferred a partial cash amt. from one broker to another inside an ira.
Waterhouse was the receiver, and I just Fri eve noticed that they did not set it
up as an IRA. I have copies of papers, clearly stated to be an IRA transfer. The
60 days have passed.]]

Huh??? It took you 60 days to open your mail? Why did it take you 60 days to reveiw this transaction?

[[ I have traded stock in the account, because I assumed
they had set it up correctly. My spouse has converted to a Roth and now, if this
is unable to be corrected, I will have to uncovert in order to save some $ tax.
The sickest part is that if they wont make the entries to make it an IRA I lose
also the ability to trade inside an IRA, and will have to redeposit the funds
gradually over many years to get it all back into a Roth.]]

Yup...which is why you NEVER want to assume that a broker, full service or otherwise, has followed your instructions. Always, ALWAYS review the paperwork.

[[Sorry long winded...but have to wait till Tues to talk to WH and see what we
can do. going crazy meanwhile, and the boards were down over wkend...help.]]

Your issue is with WH. If you have the paperwork to support your allegation that it was an IRA transfer, and WH screwed up, you may have a cause of action against them. So you'll really have to speak with waterhouse in order to clear this whole thing up. It is VERY possible that the appropriate paperwork can be done by WH in order to make this an IRA transaction. But if not, the IRS (in various court cases and IRS Private Letter Rulings) takes the position that a distribution is a distribution...even if you did all of the right things and the broker screwed up.

So work it out with WH and see what they have to say. It may take a face to face meeting or video confrence with somebody at WH if they don't see things you way. If WH insists that they will treat the transfer as a "distribution" to you, then your next stop will have to be an attorney.

Sorry for the bad news...but deal with WH and put the pressure on them.

TMF Taxes
Roy

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