Elimination of the Stretch?
An attorney I work with just came back from a tax conference where he said there is talk of eliminating the stretch provision and going back to the five year payout rule.
Have you heard anything on this?
Thanks.
Tony
An attorney I work with just came back from a tax conference where he said there is talk of eliminating the stretch provision and going back to the five year payout rule.
Have you heard anything on this?
Thanks.
Tony
Permalink Submitted by Alan - IRA critic on Sat, 2014-01-25 22:49
Permalink Submitted by Jose Morales on Mon, 2014-01-27 17:10
From the perspective of working for a financial institution that attempts to be as accomodating as possible to all clients and full of eager sales people with not much in the way of IRA knowledge (that’s what I’m here for), I would love for an even more simplified beneficiary distribution process. One of my few remaining pain points is the client that brings over an inherited IRA and expectes us (me) to calculate their mandatory distribution, having not provided us with any information regarding the original IRA, it’s owner, or exactly how the beneficiaries were written on the account documentation. Although this does fall under the “must be done by your own accountant/tax professional” it doesn’t take much in the way of complaining on the part of the client to have the sales person claim that their “best client” is going to take away their entire relationship over this one issue. I actually have yet to come across one inherited IRA holder that was completely willing to be responsible for their own distribution calculation and for that reason alone I would not shed a tear if the IRS restricted all beneficiary options to either a simple single life expectancy calculation or a 5 year rule.
Permalink Submitted by Alan - IRA critic on Mon, 2014-01-27 18:14
Here is an article that combines the possibility of a 5 year distribution period with the issues created by questionable creditor protection for inherited IRAs: http://mcgladrey.com/content/dam/mcgladrey/pdf_download/does_bankruptcy_protection_extend_to_inherited_iras.pdf
Permalink Submitted by Bruce Steiner on Tue, 2014-01-28 03:41
It’s in the Administration’s Revenue Proposals for Fiscal Year 2014, released nearly a year ago: http://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2014.pdf . See page 163. There is no way to know whether this or any other item in the Administration’s Revenue Proposals will be enacted. Whether inherited IRAs are protected from creditors varies from state to state. If that’s a concern, you can leave your IRA to your beneficiary in trust rather than outright.