conversion of 403b to nonqualified and then to roth
I opened a non-qualified annuity with Allianz and later i mistakenly changed it to 403b and I need to change it back to non-qualified. The monies I invested were not nontaxed but taxed momies. Can I make my annuity which I have since transferred to American Equity a Roth?
Permalink Submitted by mk foss on Tue, 2011-09-20 20:34
A non-qualified annuity cannot be converted to a Roth IRA. Only retirement plans and qualified annuities are eligible (with some very obscure exceptions like Exxon Valdez settlements).
Permalink Submitted by Alan Spross on Tue, 2011-09-20 21:25
How did you go about depositing the funds into the 403b? Did you cash out the annuity first? It is strange that the 403b plan accepted these funds. Obviously, you want to remove the funds and avoid taxation so will have to discuss this with the plan administrator. Their 1099R may reflect the circumstances of what they thought the transfer was composed of. After you get the 1099R you will probably have to provide documentation to the IRS or request a letter ruling to avoid the second taxation.