New Law Allows In-Plan Rollovers to Designated Roth Accounts

New Law Allows In-Plan Rollovers to Designated Roth Accounts

The IRS provides some initial guidance on "in plan" rollovers to designated Roth accounts in this item. New law provisions included in the Small Business Jobs Act of 2010 provided for this new planning opportunity. The new law provides plan participant with an opportunity to complete a Roth conversion within a 401(k), 403(b) or 457 plan. The plan needs to include an option for Roth accounts. Any amounts rolled over are treated as a taxable distribution that is included in taxable income.

Mark, Where Do I Find Section 179?

Ed, right after section 178 and just before section 180...duh!

Seriously, if you want to enjoy some enhanced tax benefits in 2010 and 2011 TeamDKB can help you to figure this out.

Generally, section 179 permits a business that satisfies limitations on annual investment to elect to deduct (or “expense”) the cost of qualifying property rather than depreciate the cost over time. For tax years beginning in 2010 and 2011, the 2010 Jobs Act amendments permit taxpayers to expense up to $500,000 of the cost of qualifying property under Code Sec. 179, reduced by the amount by which the qualified investment exceeds $2,000,000.

Qualifying property includes depreciable tangible personal property purchased for use in the active conduct of a trade or business. Off the shelf computer software placed in service in tax years beginning before 2011 is treated as qualifying property. 

The 2010 Jobs Act incentive provisions also temporarily expand the definition of qualifying property to include certain real property used in business, specifically, qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.  Up to $250,000 of the cost of qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property ("qualified real property") may be applied to the Code Sec. 179 limit for tax years beginning in 2010 and 2011. However, any amount expensed with respect to qualified real property that is disallowed under the income limitation may be carried forward only to 2011 but not to later years. Taxpayers are permitted to elect to exclude real property from the definition of section 179 property.