I am building a sig ultimate fun fly. After assembly I have noticed that my lower wing is centered with my stab. My top wing is 1/4 degree out from the lower wing and my engine is 1/2 a degree high from the reference point. The question is how far out of alignment or incidence angles have to be before they start causing problems.

well 1/4 degree and 1/2 degree are pretty small and you will be ok to fly it... If the manual states 0 degrees then that is what you want... You will be able to fly more more precision with perfect incidence... Whether it is a kit or an ARF you may need to do small modifications to whatever part is out of incidence to get them all straight... I can't speak on this plane though because I don't have one... Engine may be easy to fix with tiny washers under the top 2 bolts of the motor mount bolts to bring it online... If you want specifics on how to fix the wing incidence take a profile picture of the wing mounting and we will be able to help you...