IRA contributions – rollover- 3 questions
1. can i roll a sep IRA into a 401k – I no longer contribute to the SEP
2. Can I roll STOCK (ie, Equitable common I received at the demutualization – was never taxed) directly to my IRA from my brokerage account? (all cost basis)
3. can i move any stock from the brokerage account to the IRA if I keep track of the cost basis?
Permalink Submitted by Alan Spross on Sun, 2009-11-22 21:11
1) Yes, if the 401k plan will accept IRA rollovers
2) No. All regular IRA contributions must be in cash.
3) No, same as above.
You can distribute stock from an IRA to a taxable account, but all new regular IRA contributions must be in cash. Investments in an IRA do not carry any cost basis of their own. Your IRAs may have a basis, but only if the cash contributions are not deductible when you make them, and Form 8606 is filed.
Permalink Submitted by Anonymous (not verified) on Sun, 2009-11-22 21:22
1. It all depends on if the 401K Plan will accept the money – it all rests on that decision. A SEP is a really a regular IRA and, if they accept it, can be rolled over. Only pre-tax money can be rolled to a 401K so if you ever contributed non-deductible contributions, that portion must stay behind. One problem you may run into is that some 401Ks will require some kind of proof from the IRA custodian that the funds only consist of pre-tax money. Most IRA custodians will not provide that.
2. Not really understand the term “demutualization”. If this money is regular retail (non-IRA) money you [u]cannot[/u] make a contribution “in kind” meaning simply keeping the stock and use the value as your contribution amount on the day of transfer. IRA contributions can never be made with stock; only cash.
3. The answer will be the same as above. You would need to sell the stock, sweep to cash, make the contribution to cash, and rebuy the stock – obviously not what you want.
Oddly enough, distributions from IRAs [u]can[/u] be made “in kind” with stock.
PS. Just saw alan’s response as I was writing, so I will still post since I took time to write this – same answers.
pmk