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Important Information about IRAs in your Place Trade Brokerage Account

 

Our clients may choose to hold their IRA accounts in either a brokerage account or an investment company account. If you wish to invest in stocks, bonds, options and other traditional securities you will need to choose a brokerage account. If you wish to invest in mutual funds you may choose either type of account. To learn more about investing in mutual funds within your IRA please speak with your advisor or give us a call at 1-919-719-7200 today! 

 

The following contains a snapshot of information specific to your PT brokerage IRA account. To learn more about specific types of IRAs and other qualified plans please click on the specific type of IRA below, review our IRA FAQs or visit Retirement Place for more information: 

 
     
     
 
 

IRA Account Types 

What types of IRAs are available in my PT brokerage account?

 
 

IRA Customer Types

 
 

Transfer Methods

 
 

Conversions and Recharacterizations

 
 

Contribution Limits

 
 

IRA FAQs

 
 

IRA Fees Specific to Brokerage Accounts (ONLY)

 
 

Retirement Planning (Including Qualified Plans)

 
 
     
     
 


IRA Account Types

 

  • Place Trade offers each type of IRA to their clients however some may not be held in a brokerage account at the present time. SIMPLE IRAs are available via other investment companies that we work with which do not allow for individual stock, option and bond trading. We are currently working towards offering all forms of retirement plans within brokerage accounts in the near future. Aside from general IRS regulatory information (IRA Rules), the following discussion refers to only those IRA accounts that are currently available in your PT brokerage account.
  • US citizens living anywhere in the world and US resident aliens may open cash or margin Individual Retirement Accounts (IRAs)
  • IRA margin accounts are afforded all the benefits of a margin account, such as the ability to day trade and the ability to trade multiple currencies and multiple currency products, however IRAs are subject to the following limitations:
    • IRA accounts cannot borrow cash (i.e. have a debit balance or short stocks).
    • IRA accounts may be opened in any base currency, but when trading in a non-base currency product a currency trade must be executed first as you cannot borrow currencies.
    • IRA accounts can only cross-margin single stock futures, not stocks and options.
    • IRA accounts cannot borrow currencies.
Clients are advised to consult with their tax and/or legal advisors for further details on IRA rules and regulations prior to making any tax related or investment decisions.
 
 
 

 

IRA Customer Types

 

When you open an IRA account with Place Trade, you must select an IRA customer type. It is very important that you check off the correct type of IRA that you desire because each application has specific requirements. If you choose the wrong application you will need to start over with a new application to correct the IRA type. (We cannot just change the type of account for you.)

The following IRA customer types are available:

  • Traditional
  • Traditional Rollover
  • Traditional Inherited
  • Roth
  • Roth Inherited
  • Simplified Employee Pension (SEP)
  • Simplified Employee Pension (SEP) Inherited
IRAs - Traditional, Roth, SEP, Rollovers and Inherited
 
 

 

Transfer Methods

What are Transfer Methods? 

Transfer methods describe the way a Place Trade (PT) IRA account is funded.

All of the following transfer methods are considered cash transactions. Trustee-to-Trustee transfers may also use an ACATS position transfer in Account Management (unless the transfer is coming from a mutual fund company where funds have been held fund direct).

  • Contribution - The dollar amount of assets you are contributing to an IRA account, subject to certain limits based upon your age and the year of the contribution. Contributions are reported to the Internal Revenue Service (IRS).
  • Rollover - A transfer of funds from an IRA account with another trustee/custodian, within 60 days following a distribution, to a PT IRA account. Rollovers must be reported to the IRS. IRA account types must be the same in order to rollover assets; for example, if the originating account is a Roth IRA, your PT account must also be a Roth IRA.
  • Direct Rollover - A transfer of funds from a qualified plan (pension, 401(k) or other qualified retirement plan) with an employer to a PT Traditional IRA account. In a Direct Rollover, the trustee/custodian of your employer qualified plan (401(k) or pension) transfers your retirement assets directly to PT. In general, while there are no withholding taxes or penalties applied to a Direct Rollover, Direct Rollovers are reported to the IRS.
  • Trustee-to-Trustee - A transfer of funds from an IRA account held with another trustee/custodian to a PTF IRA account, where the assets are transferred directly from trustee/custodian to trustee/custodian, with no distribution of assets to you. ACATs position transfers are available, but the IRA account type and Tax ID must match in order to execute the transfer. Trustee-to-trustee transfers do not have to be reported to the IRS.

Please refer to the Tax Reporting page on our website for information on IRS forms you will receive when transferring retirement plan assets.

 

IRAs - Traditional, Roth, SEP, Rollovers and Inherited

The following types of IRAs are available in and may be transferred to your PT brokerage account using these methods:

             
 

IRA Type

 

Description of IRA

 

Transfer Method

 
Traditional

A Traditional IRA is a retirement savings plan that allows an individual taxpayer to contribute earnings that will grow tax-deferred until they are withdrawn.

Contributions are subject to annual limits depending on the age and income of the account owner as well as other factors. Contributions may or may not be deductible depending on the individual's circumstances.

Earnings accumulate tax deferred until distributed to you at which time the earnings are subject to tax upon withdrawal.

A spouse may contribute to a separate account subject to the same limits and restrictions. Withdrawals made prior to age 59½ are subject to a 10% penalty unless certain special circumstances apply.

Distributions must begin by the account owner's required beginning date (RBD), which is April 1 following the year you turn age 70½. Once you reach age 70½, you must withdraw at least a minimum amount – an annual Required Minimum Distribution (RMD) - by December 31 at 12 PM (noon) EST, 2015 (if by wire) and December 29 at 11:59 PM (midnight) EST, 2015 (if by check or ACH). If an account owner fails to withdraw the full amount of the RMD annually, or fails to withdraw the RMD, there is a 50% tax penalty on the amount not withdrawn. (This means that the IRS will penalize you for a full 50% of what you were required to withdraw... seriously!)

  • Contribution
  • Rollover
  • Direct Rollover
  • Trustee-to-Trustee
  • IRA Conversion
 
Traditional Rollover

 

A traditional IRA account that receives assets directly from an employer-sponsored plan such as a 401(k) or pension plan within 60 days of distribution from the plan. As long as no other assets are contributed to the Traditional Rollover IRA, the monies may be rolled over into a new employer's plan. A traditional rollover IRA is commonly used if you are changing jobs or retiring.

  • Contribution
  • Rollover
  • Trustee-to-Trustee
  • IRA Conversion
 
 
Traditional Inherited

 

An IRA account you may set up as the beneficiary of a Traditional IRA you inherited from a spouse or other IRA account owner who has died, to receive a transfer of beneficiary IRA assets.

  • Trustee-to-Trustee
 
Roth

 

A retirement savings plan that allows an individual taxpayer to contribute earnings, subject to certain income limits. Earnings accumulate tax-free and contributions are nondeductible. Unlike Traditional IRAs, a Roth IRA account owner may continue to contribute after age 70½ if they have earned income. Withdrawals prior to age 59½ are subject to a 10% penalty unless special circumstances apply. There are no age requirements when an account owner must begin taking distributions. Contributions are subject to annual limits depending on the age of the account owner.

  • Contribution
  • Rollover
  • Trustee-to-Trustee
  • IRA Recharacterization
 
Roth Inherited

 

An IRA account you may set up as the beneficiary of a Roth IRA you inherited from a spouse or other IRA account owner who has died, to receive a transfer of beneficiary IRA assets.

  • Trustee-to-Trustee
Simplified Employee Pension (SEP)

 

A tax-deferred retirement plan for small businesses and self-employed individuals where an employee can set aside a percentage of pre-tax income into the plan. Annual contributions an employer makes to an employee's SEP-IRA cannot exceed the lesser of 25% of compensation, or $53,000 for 2016 and $54,000 for 2017. The same limits apply to contributions made to a self-employed individual's SEP-IRA. There is 100% vesting of all plan contributions. Distributions generally follow the same rules that apply to IRAs.

  • Contribution
  • Rollover
  • Trustee-to-Trustee
  • IRA Conversion
 
Simplified Employee Pension (SEP) Inherited
An IRA account you may set up as the beneficiary of a SEP IRA you inherited from a spouse or other IRA account owner who has died, to receive a transfer of beneficiary IRA assets.
  • Trustee-to-Trustee
 
             

 Clients are advised to consult with their tax and/or legal advisors for further details on IRA rules and regulations prior to making any tax related or investment decisions.

 
 IRAs - Traditional, Roth, SEP, Rollovers and Inherited
 
 
 

 

Conversions and Recharacterizations


IRA Conversion


An IRA conversion is a transfer of Traditional, Traditional Rollover or SEP IRA assets to a Roth IRA with the same custodian or as a trustee-to-trustee transfer or rollover. A conversion is subject to Form 1099-R reporting for the distribution from the non-Roth and Form 5498 for the contribution to the Roth IRA.


The deadline to convert to a Roth IRA is December 31 of the year you choose to convert.


IRA Recharacterization

An IRA recharacterization is a transfer of converted Roth IRA assets back to a new or existing Traditional IRA account. Roth IRA converted amounts from a SEP IRA may also be recharacterized back to a SEP IRA account. IRS reporting is required for the distribution from the Roth IRA and the contribution to the non-Roth IRA.


Timing

Election to recharacterize must be made by the tax return due date, plus a six-month extension period (whether or not the return is extended). The deadline to recharacterize a 2014 Roth conversion is October 15, 2015. An IRA recharacterization is a transfer back to a new or existing Traditional IRA of converted Roth assets. Roth IRA converted amounts from a SEP IRA may also be recharacterized back to a SEP. IRS reporting is required for the distribution from the Roth and the contribution to the non-Roth IRA. Timing Election to recharacterize must be made by the tax return due date, plus the maximum six-month extension period (whether or not the return is actually extended).


Reconversion

Reconversion is defined as a second conversion (following a Recharacterization) from a non-Roth IRA to a Roth IRA. Taxpayer has already made a first conversion from a non-Roth to a Roth IRA and then recharacterized the conversion amount (including net earnings) back to a non-Roth IRA. You may not convert, recharacterize and then reconvert in the same tax year. IRS reporting is required.

A taxpayer cannot reconvert back to a Roth IRA until the later of:

  • January 1 of the tax year following the year of the first conversion, or
  • 30 days after the recharacterization to a non-Roth IRA

If the taxpayer makes a reconversion within the same tax year or before the 30 day waiting period, the reconversion is disregarded and the taxpayer must use the value of the non-Roth IRA at the time of the first conversion to calculate the taxable income for the year.

Additional Information:

  • If you are age 70½ or older and you have not taken a Required Minimum Distribution (RMD) from your IRA, you must do so prior to converting to a Roth IRA.
  • For IRA Conversions from a PT traditional IRA (or IRA rollover) account, you first must open a PT Roth IRA if you do not already have one.
  • Your existing traditional IRA account will be closed upon completion of a full conversion transfer.
  • Please note that transfers of securities positions from a Traditional IRA to a Roth IRA will only be accepted between accounts with matching names and taxpayer identification numbers.
  • You cannot revoke or modify your election to recharacterize after the election has been made.
  • An election to recharacterize must be made by the federal tax return due date, plus the maximum six-month extension period, for example, October 15, 2011.

Please consult your tax advisor before deciding to convert to a Roth IRA. Clients are advised to consult with their tax and/or legal advisors for further details on IRA rules and regulations prior to making any tax related or investment decisions.

 

 IRAs - Traditional, Roth, SEP, Rollovers and Inherited

 
 

 

 

IRA Contribution Limits Per Year

 

 

Contribution Year

Roth, Traditional &

Direct Rollover

Roth, Traditional, &

Direct Rollover

Simplified* Employee Pension

(SEP- IRA)

 
  Age

Under Age 50

Age 50 and over**

No Catch-up Available

 
  2016

$5,500

$6,500

Lesser of:

25% eligible Compensation

or $53,000

 
  2017

$5,500

$6,500

Lesser of:

25% eligible Compensation

or $53,000

 

 

 

 

Contribution Deadline

Filing Deadline

Excluding Extensions

April 15 of following year 

Filing Deadline

Excluding Extensions

April 15 of following year 

Employer Filing Deadline

Including Extensions

April 15 of following year or

as extended October 15

 

*This is NOT a SIMPLE IRA!     **Includes $1,000 Catch-up Contribution for individuals age 50 and over.

 

Clients are advised to consult with their tax and/or legal advisors for further details on IRA rules and regulations prior to making any tax related or investment decisions.

 
     

 



IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

 IRAs - Traditional, Roth, SEP, Rollovers and Inherited


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Please be sure to check with your tax and/or legal advisor prior to making any contributions, withdrawals or other changes to your retirement account. Place Trade Financial, Inc. does not offer tax or legal advice. Information provided by Place Trade is for educational purposes and should not be considered as tax or legal advice under any circumstances.

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