Important Information about IRA Accounts


Instructions for Completing and Submitting Self-Directed Traditional, Roth, Rollover, & SEP IRA Accounts

There are primarily four types of Individual Retirement Accounts (“IRAs”) that an OptionsHouse client may open. These four accounts are:

  1. Traditional
  2. Roth
  3. Rollover
  4. SEP

Apex Clearing Corporation is a self trustee for these four types of IRA accounts.

Traditional IRA

A. Types of contributions

Your Traditional IRA can accept three different types of contributions:

  1. Checks, cash, money orders, or electronic fund transfers for a regular contribution.
  2. Transfers or rollovers of cash, securities, or other assets from another Traditional IRA.
  3. Recharacterizations of cash, securities, or other assets from a Roth IRA.

B. Eligibility to Establish an IRA

You can set up and contribute to a Traditional IRA if you (or your spouse, if filing a joint tax return) received taxable compensation for the year and you were not age 70 by the end of the calendar year.

C. Contribution Limits

The maximum amount you can contribute to your Traditional IRA is the lesser of:

  • $2000 (or such amount as prescribed by law), or
  • The amount of compensation you must include as income for the year.

Roth IRAs

A. Types of Contributions

Your Roth IRA can accept three different types of contributions.

  1. Checks, cash, money orders, or electronic fund transfers for regular contributions.
  2. Transfers or rollovers of cash, securities, or other assets from another Roth IRA.
  3. Transfers or rollovers of cash, securities, or other assets from a Traditional IRA.

B. Eligibility to establish a Roth IRA

Anyone with earned income can set up a Roth IRA. This includes minor children. You must make contributions based on the rules in the following sub-sections.

C. Contribution Limits

The maximum contribution you can make to your Roth IRA is based on the following four items:

  1. Your taxable compensation.
  2. Your tax filing status.
  3. Your modified adjusted gross income.
  4. Contributions, if any, made to a Traditional IRA for the year.

IRA Rollovers

A. General Conditions

  1. Rollovers must be deposited to the IRA within 60 days after you have taken receipt of the last asset that was distributed.
  2. You may take a distribution from a Traditional IRA and make a rollover contribution to
    another Traditional IRA only once in any twelve consecutive month period. The one-year period begins on the date you receive the IRA distribution, not on the date you roll it over into another IRA.
  3. In general, only the taxable portion of your payment is an eligible rollover distribution.
    If you have made after-tax employee contributions, these contributions will be non-taxable when they are paid to you and cannot be rolled over.
  4. You cannot roll over a payment if it is part of a series of equal (or almost equal) payments that are made at least annually and will last for:
    1. Your lifetime (or life expectancy), or
    2. You and your beneficiary’s lifetime (or life expectancy),
    3. A period of ten years or more.
  5. An amount that must be distributed during a particular year under the required distribution rules is not eligible for rollover treatment.
  6. You can choose to have any part of an eligible rollover distribution paid directly to a
    Traditional IRA in a direct rollover. If you choose a direct rollover, you are not taxed on the payment until you take it out of the IRA. This IRA will accept direct rollovers.
  7. If the rollover includes property such as company stock and the stock has been sold, you may still roll over the proceeds. The gain or loss on the sale of the property is not
    recognized if the rollover is for the entire amount allowable.
  8. If you receive an eligible rollover distribution from an employer-sponsored retirement plan and roll part or all of it into an IRA, you can roll over those assets into another employer-sponsored retirement plan later. The IRA must contain only those assets received from the first employer’s plan and any gains and losses on those assets. If you mix regular contributions or rollovers from another IRA in the account, it will no longer qualify for rollover to another employer-sponsored retirement plan.

The following information applies to Traditional and Roth IRAs

A. Types of Contributions

  1. All contributions must be in cash with the exception of rollovers and conversions.
  2. No part of the trust may be invested in life insurance.
  3. The entire balance of your IRA is non-forfeitable.
  4. The assets of your IRA may not be commingled.

B. Prohibited Transactions

The Tax Code prohibits you from using your IRA to engage in certain transactions. You may lose the tax-deferred status of your IRA if you engage in these transactions. Generally, those transactions are:

  1. Sale, exchange, or leasing of any property between the plan and a party-in-interest.
  2. Lending money or any other extension of credit to a party-in-interest.
  3. Furnishing of goods, services, or facilities, between the plan and a party-in-interest.
  4. Transfer to or use for the benefit of a party-in-interest of the income or assets of the plan in his or her own interest or for his or her own account.
  5. Receipt of any consideration for his or her own personal account by a party-in-interest that is a fiduciary dealing with the plan concerning the transaction involving the income or assets of the plan.
  6. Pledging the account or part of the account as security for a loan.
  7. Investing in collectibles such as works of art, rugs, antiques, certain metals, gems, stamps, most coins, or alcoholic beverages.

Title of Each of the IRA Accounts

A. Traditional Account
Apex Clearing Corporation FBO
John B. Doe, IRA

B. Roth Account
Delaware Charter Guarantee & Trust Co., Trustee FBO
John B. Doe, Roth IRA

C. Rollover Account
Delaware Charter Guarantee & Trust Co., Trustee FBO
John B. Doe, IRA Rollover

D. SEP Account 
Delaware Charter Guarantee & Trust Co., Trustee FBO
John B. Doe, SEP IRA

OptionsHouse Mailing Address

IRA Department
OptionsHouse, LLC
P.O. Box 812
Chicago, IL 60690

Please remember, OptionsHouse does not provide legal advice. Contact your attorney for specific legal advice.

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