My company was sold and the company's Employee Stock Ownership Plan
was terminated as a result of the sale. All participants are, of
course, required to take distributions either in the form of a
rollover or in cash or a combination of the two. I would like to
rollover my distribution into a *ROTH* IRA account. I already have a
Roth IRA account at Vanguard. I understand that I will have to pay
taxes on the rollover this year. I have been unemployed by choice in
2008, so this would actually be a very good year to pay additional
taxes as so far, my earned income for 2008 is $0. I have non-IRA
money set aside to cover the additional taxes. Hopefully I have
already answered the questions you would ask.
So here is my question: In the IRS literature, it says "After 2007,
you can rollover amounts from the following plans into a Roth IRA: A
qualified pension, profit-sharing or stock bonus plan (including a
401(k) plan),..." I looked at the ESOP Summary Plan Description and
it says "This Plan is a qualified retirement plan commonly referred to
a an Employee Stock Ownership Plan." Does an ESOP qualify for the
rollover into a Roth IRA? Is there any reason I can't?
(IRS reference http://www.irs.gov/formspubs/article/0,,id=181213,00.html)
Thanks for your help!
Heather
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