January 22, 2012

When decisions are impaired by disability

In following self-imposed restrictions on her IRA distributions, a bipolar investor recently learned from the IRS that her actions would not cause any adverse tax consequences. Here's the story: “John” and “Jane” got divorced, and as part of their agreement, Jane was entitled to...

• Individual retirement accounts (IRAs),
• ING Group,
• retirement planning

December 11, 2011

When a mom raids her child's IRA

In an unusual private-letter ruling, the Internal Revenue Service recently allowed a 13-year-old beneficiary of her father's company plan assets largely to undo a previously taxed lump-sum distribution and transfer the distributed plan funds to an inherited IRA for the child's benefit.

• Individual retirement accounts (IRAs)

November 13, 2011

A fraud warning for self-directed RIAs

By Ed Slott

In September, the SEC issued an investor alert warning investors to be wary of fraudulent promoters targeting self-directed IRAs

• Individual retirement accounts (IRAs)

October 16, 2011

More the exception than the rule

Recently, the Tax Court ruled that a taxpayer's continuing business activities and lack of credible evidence failed to qualify him as disabled under the tax code

• Individual retirement accounts (IRAs)

September 18, 2011

IRAs and special-needs trusts

By Ed Slott

In a recent private-letter ruling (PLR 201116005), the Internal Revenue Service allowed a disabled beneficiary to transfer his share of two inherited individual retirement accounts to a special-needs trust of which he was the beneficiary

• Individual retirement accounts (IRAs)

August 21, 2011

Roth re-characterization confusion

By Ed Slott

Recent market volatility exposed a basic misunderstanding by financial advisers and even certified public accountants of the mechanics of undoing Roth conversions, a process called a Roth re-characterization

• Individual retirement accounts (IRAs)

July 17, 2011

Broken window: Rollover horror stories

By Ed Slott

When clients withdraw money from an individual retirement account or employer retirement plan and want to move those funds to another retirement account, they must roll over those funds within 60 days of the date that they received the distribution from the plan or IRA

• Individual retirement accounts (IRAs)

June 12, 2011

Five considerations for Roth redos

Just as 2010 may have been the year of the Roth conversion, 2011 may be the year of the Roth re-characterization. Some clients had sticker shock after seeing the tax bill on their 2010 Roth conversions and want to undo those conversions. That may not be the best move. Before they re-characterize, ...

• Individual retirement accounts (IRAs)

May 15, 2011

401(k) rights trumped by ERISA

By Ed Slott

In a recent case (Cajun Industries LLC v. Robert Kidder, et al.), the court ruled that despite having previously named his three children as beneficiaries of his 401(k) plan, a deceased plan participant's 401(k) balance will pass to his new wife

• Individual retirement accounts (IRAs)

April 17, 2011

Defining the 'professional' trader

The Tax Court recently ruled that a taxpayer who made just three trades in 2005 didn't qualify as a “professional trader” that year. As a result, the income from his investments wasn't considered compensation and he was ineligible to receive a deduction for an IRA contribution....

• Individual retirement accounts (IRAs),
• tax