Electronic Delivery Disclosure
- 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:
01 Traditional
02 Roth
03 Rollover
04 SEP
Penson Financial Services is a self trustee for these four types of IRA accounts.
A. Types of contributions
Your Traditional IRA can accept three different types of contributions:
01 Checks, cash, money orders, or electronic fund transfers for a regular contribution.
02 Transfers or rollovers of cash, securities, or other assets from another Traditional IRA.
03 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.
A. Types of Contributions
Your Roth IRA can accept three different types of contributions.
01 Checks, cash, money orders, or electronic fund transfers for regular contributions.
02 Transfers or rollovers of cash, securities, or other assets from another Roth IRA.
03 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:
01 Your taxable compensation.
02 Your tax filing status.
03 Your modified adjusted gross income.
04 Contributions, if any, made to a Traditional IRA for the year.
A. General Conditions
01 Rollovers must be deposited to the IRA within 60 days after you have taken receipt of the last asset that was distributed.
02 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.
03 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.
04 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:
i. Your lifetime (or life expectancy), or
ii. You and your beneficiary's lifetime (or life expectancy),
iii. A period of ten years or more.
05 An amount that must be distributed during a particular year under the required distribution
rules is not eligible for rollover treatment.
06 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.
07 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.
08 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
01 All contributions must be in cash with the exception of rollovers and conversions.
02 No part of the trust may be invested in life insurance.
03 The entire balance of your IRA is non-forfeitable.
04 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:
01 Sale, exchange, or leasing of any property between the plan and a party-in-interest.
02 Lending money or any other extension of credit to a party-in-interest.
03 Furnishing of goods, services, or facilities, between the plan and a party-in-interest.
04 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.
05 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.
06 Pledging the account or part of the account as security for a loan.
07 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
PFSI 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
- Title of Each of the IRA Accounts
IRA Department
OptionsHouse, LLC
303 E. Wacker Drive
Suite 700
Chicago, IL 60601
Please remember, OptionsHouse does not provide legal advice. Contact your attorney for specific legal advice.
