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I’m trying to understand the taxation gymnastics. If I take a CRD in 2020 of $30k and use the 3...

We are in the dog days of summer and this year is a crazy and unsettling time. The last thing on your mind may be your IRA. However, you should be aware that an important deadline is quickly approaching. If you took your 2020 required minimum distribution (RMD) from your IRA and now want to repay it, your time may be running out. The deadline for these three repayment remedies is August 31. 1. Repay more than one RMD distribution. Normally, you are limited to rolling over only one IRA distribution in a one-year period. If you take multiple distributions during this period, you are typically out of luck. However, these are not normal times! In Notice 2020-51, the IRS waives the one-per-year rule for 2020 RMDs. This is good news if you took your RMD in multiple distributions, which many people do.

Client had a Thrift Savings Plan (qualified plan) from which RMDs were taken in January, February and March. The client...

Yes, trusts can play an instrumental role in estate planning. Yes, special needs trusts are invaluable to those with disabled or chronically ill family members. Trusts are essential for minors and for those who may struggle with managing money. Trusts also allow for post-death control of assets. But they are not for everyone, nor are they a panacea when it comes to estate planning…especially with IRAs. I continue to pound my head on the desk every time I encounter a trust unnecessarily named as an IRA beneficiary. Why did the IRA account owner name the trust? Bad advice? Was he simply trying to keep up with the Jones’ who bragged about their trust? Did he read someplace that all trusts are great? Was he intentionally trying to make things difficult for his IRA beneficiaries? Sadly, “making things difficult” is oftentimes the unintended result.

#1 – taxpayer retires in 2020 and first RMD generally due 4/1/2021 and second due 12/31/2021. Is it correct that...

Hidden within the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) signed into law last December is a provision giving businesses extra time to establish certain new tax-qualified retirement plans. Prior to the SECURE Act, a new workplace plan had to be adopted by the last day of the employer’s tax year. Despite that deadline for adopting a new plan, businesses were always allowed extra time to make retroactive employer contributions for any year (including the plan’s first year). The employer contribution deadline is the due date (including extensions) of the company’s federal tax return.

I have a client who took a lump sum check less the 20% withholding from her mothers 401(k) after the...

I am trying to leave a stream of income to my Grandson by leaving him a taxable IRA and a...

Last year the SECURE Act became law and eliminated the stretch IRA for millions of IRA beneficiaries. However, for some IRA beneficiaries the stretch lives on. For most beneficiaries, the stretch is now replaced with a ten-year payout period. Beginning for deaths in 2020, the ten-year rule will apply to designated beneficiaries who are not eligible designated beneficiaries under the SECURE Act. Eligible designated beneficiaries include spouses, minor children of the IRA owner, chronically ill and disabled individuals and beneficiaries who are not more than ten years younger than the IRA owner.

My 82 year old client died recently. Despite my gentle nagging, she never named new beneficiaries after her husband’s death...