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Heed custodian's asset allowances

August 10, 2014

The Tax Court has ruled that an individual had a taxable IRA distribution when he tried to get around his custodian's policy of not allowing real estate as an individual retirement account investment. The court said the custodian didn't have...

Inherited IRAs in bankruptcy cases

July 13, 2014

The Supreme Court ruled unanimously last month that inherited individual retirement accounts are not protected under federal bankruptcy laws. This ruling does not affect your clients' own IRAs. Those are retirement funds that are protected in...

In divorce, retirement is at risk

June 8, 2014

Splitting a retirement plan in divorce often means tax problems. While matrimonial attorneys usually assist in the division of assets, 401(k)s, IRAs and other retirement plans require special handling since eventual distributions generally will...

Using an IRA like a bank is risky

May 11, 2014

The Tax Court recently ruled that an individual's distribution from a simplified employee pension individual retirement account was taxable and subject to the 10% early-distribution penalty when the funds weren't rolled over within 60 days (Thomas...

IRS: Only one IRA rollover per year

April 13, 2014

Last month, I wrote about the case involving the so-called once-per-year IRA rollover rule (Alvan L. Bobrow, et ux., v. Commissioner, TC Memo 2014-21, Docket No. 7022-11). The Tax Court ruled that once per year means exactly that. The rollover...

A warning on multiple IRA rollovers

March 16, 2014

In a game-changing decision that has wide-ranging ramifications for financial advisers and tax professionals alike, the Tax Court ruled that the once-a-year IRA rollover rule applies to all of one's individual retirement accounts, not to each...

New IRS rules on hard-to-value IRAs

January 19, 2014

Most stocks and other traditional investments are easy to value. The price is determined by the markets or found on a bank statement. But some assets are not so easy to find a value for, and that's a problem if those assets are held in an individual...

Charitable IRA provision: Time is now

December 8, 2013

Once again, the qualified-charitable-distribution provision is set to expire at year-end. Not taking advantage of this provision could be costly for high earners due to the 2013 tax increases affecting these clients. In fact, not using the QCD...

Parents lose out on 401(k) windfall

November 10, 2013

The 8th U.S. Circuit Court of Appeals recently ruled that a surviving spouse's promise to waive her rights to her husband's 401(k) funds by signing a postnuptial agreement was invalid because the agreement was written incorrectly. As a result,...

IRA Alert: Tax court shoots down medical exception

October 13, 2013

Recently, the Tax Court ruled that an individual was liable for the 10% early-distribution penalty on a retirement plan distribution. The man didn't qualify for the medical-expense exception to the 10% early-distribution penalty be-cause he...

Don't blame the custodian for IRS levies

September 15, 2013

A lthough individual retirement accounts are tax shelters, a recent federal court ruling drove home the point that the retirement vehicles are taxable and that they are not sheltered from a demand for payment by the Internal Revenue Service...

Understand clients' pension plans

August 18, 2013

A ruling against the plaintiff in a recent pension benefit case highlights the need for financial advisers to understand clients' pension plans, particularly plans' rules around marriage. The 6th U.S. Circuit Court of Appeals recently ruled...

Check clients' IRA agreements

July 14, 2013

After several lost court battles, James Daley Jr. finally won his case allowing his individual retirement accounts to be protected in bankruptcy. The 6th U.S. Circuit Court of Appeals ruled last month that certain cross-collateralization language...

Five budget items that target retirement accounts

June 9, 2013

Five proposals were included in this year's federal budget that directly relate to retirement accounts. Here is a rundown of each proposal, its main benefit and its drawback. 1) Establish a “cap” on retirement savings, prohibiting additional...

Make sure 72(t) distributions are taken

May 12, 2013

In a recent private-letter ruling, the Internal Revenue Service allowed a woman to make up a missed 72(t) distribution that wasn't taken because the custodian's employee handling the distribution retired before setting the client's distribution....

Rethinking a break on lump sums

March 17, 2013

Taking advantage of the special tax break for net unrealized appreciation on lump-sum distributions from a retirement plan most often was a fairly simple decision, but given all the tax changes that took effect at the dawn of this year, that...

Take a fresh look at Roth conversions

February 17, 2013

Now that we finally know the tax laws for this year, it is time to sit down with clients and re-evaluate their financial and tax plans. Some may be relatively unaffected by the American Taxpayer Relief Act of 2012, while others may require adjustments....

Qualified charitable distributions return

January 20, 2013

As expected, Congress has renewed the special tax break for charitable individual retirement account rollovers, known as qualified charitable distributions. QCDs apply only to IRA owners and beneficiaries 701/2 or older who make a direct transfer...

Roth 401(k) switch is a good deal for younger taxpayers sitting on cash

January 6, 2013

The Senate's decision to lift restrictions on Roth 401(k) conversions will be a boon to select individuals — those who can afford the tax bill now and whose employers have a Roth plan in place. A key to the American Taxpayer Relief Act of...

Sandy could blow through IRAs

December 9, 2012

Hurricane Sandy's pummeling of the Eastern U.S. caused more than $50 billion in damages, according to some estimates. Unfortunately, many of those affected by the storm could be about to exacerbate their situation by making costly financial...

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