Frequently Asked Questions FAQs

Here are some frequently asked questions:


How do I set up an account with Simpson Capital?  

Go to the Open An Account

Portfolio Management

Is investing in the physical form of gold a good idea?

No, it has inferior long-term returns, a negative current yield and inefficient asset class. for more information visit the gold post entry on our Market Strategist Journal blog.


What should you do if you contributed too much to your  IRA? Will you be penalized?

You can remove excess funds contributed in a particular year without penalty if removed before the tax filing deadline for that year including extensions. For example, if you made a $4,000 IRA contribution on April 15, 2016, for the 2015 tax year, the deadline for removing the excess cash without incurring the 6% penalty would be your tax filing deadline, including extensions, for tax year 2016. Check with a tax professional to determine the best solution for their situation.

Can you contribute to a traditional IRA and Roth IRA in the same year? 

Yes, however, the total contribution cannot exceed the annual contribution limit. If you are ineligible to make the full contribution to the Roth due to Modified Adjusted Gross Income (MAGI), the remaining amount can be contributed to the traditional IRA.

Can my client make a stock contribution to an IRA?Cash or cash equivalents are the only method for contribution to an IRA. However, if the stock certificate was originally in an IRA or qualified retirement plan (pre-tax money) your client can deposit the certificate into a traditional IRA as a rollover contribution.

You took a distribution, but rolled it back within 60 days. Why is this still reported on a Form 1099-R?

IRA account holders may take one 60-day distribution per all IRA accounts in a 12-month period without incurring taxes or penalties as long as the distribution is rolled back in-kind (e.g., cash for cash distributions, and the same security for a distribution of securities) within 60 days. However, even though a taxable event has not occurred, IRS regulations require that both the distribution and the rollover contribution be reported to the IRS on Forms 1099-R and 5498.

What is the procedure when an IRA account holder dies?

If the IRA account holder dies, a certified copy of the death certificate and the applicable inherited IRA account application needs to be completed for each surviving beneficiary. The form will provide detailed instruction on how SCM is to distribute the assets to the beneficiary.

What is the difference between a rollover IRA and a contributory IRA?

These names describe how the assets are deposited in the retirement account. A contributory IRA, also known as a traditional IRA, is generally opened as an account to make annual contributions. A rollover IRA is also a traditional IRA and is generally opened as an account to permit the tax-free movement of assets from a qualified retirement account such as a 401(k). It is designed for individuals who have terminated employment, retired or whose company has terminated its retirement plan and want to preserve the ability to roll these assets back into another employer plan at a later date. You can co-mingle assets and make annual contributions to a rollover IRA or transfer assets from a qualified retirement account to a traditional IRA, but once you do you may lose the ability to roll into an employer plan if the receiving plan only accepts assets that weren’t co-mingled.

Can you combine a SEP-IRA with a traditional IRA?

You may choose to combine the SEP-IRA into a traditional IRA, but the annual SEP-IRA contribution limits will no longer apply; you will have to use the traditional IRA contribution limits. Instead, you may choose to combine all your IRAs into a SEP-IRA, which will allow them to continue using either the annual SEP-IRA contribution limits or the annual traditional IRA contribution limits.

Can we withhold state taxes on your IRA distribution?

Yes. State taxes can be withheld from a distribution if withholding is allowed by your state of residence.

What should you do if you converted a traditional IRA to a Roth IRA, and now wants it reversed?

The reversal of a conversion is called a re-characterization. We can complete a form prior to your tax filing deadline (including extensions).


Frequently Asked Questions
Palos Verde Peninsula, California 2009