Remember coronavirus-related distributions, or “CRDs”? Passed as part of theCARES Act in March 2020, CRDs were special distributions designed to help people who contracted COVID or had financial hardship caused by the pandemic. IRA owners or company plan participants who qualified as “affected individuals” could take CRDs of up to a total of $100,000 anytime during 2020.
Question:Dear Ed Slott and Company,I am a longtime subscriber, having met and talked with Ed at several industry conferences, going back well over 20 years. Which, with all of Ed’s great work and active networking, puts me in a pretty big club!In any event, a CPA has turned to me with a problem.A client of his passed away earlier this year with $1.7M in her IRA. Her Estate was the beneficiary of the IRA. Her 80+ year old siblings are the beneficiaries of the estate. I know, not great facts. But, it gets worse.
Question:A new customer came to me asking for help with an IRA. Unfortunately, he had already accepted a check from the 401(k) plan made out to him personally. He sat on the check for 5 months and deposited it into his checking account last week. He is only 50 years old. Since we are well after the normal 60-day rollover period, is there any way that this can be repaired? Perhaps under the CARES act of 2020 if his departure was Covid related?Any direction you can provide would be appreciated.
Casinos have house rules. These rules dictate what patrons can and cannot do. They are often written down, posted, and there is no debating the validity of said guidelines. House rules govern all those under the purview of management. I have house rules of my own when it comes to card games, darts, boardgames and any other source of competition. House rules can also apply to non-competitive situations. No swearing. Take your shoes off. Don’t sit on the good furniture in the living room.
Question:Hi,I have a client that took a $14k IRA distribution on 1/10/2021 and another $14k distribution on 2/10/2021. He wants to replace all $28k using the 60 day rollover as funds are no longer needed.Does the 60 day rollover rule allow him to replace all 28k (from both distributions) within 60 days from the first distribution on 1/10/2021?Or does the 60 day rollover rule only allow him to just replace one distribution taken (even though both were taken within 60 days of each other)? Thus, he can only put back $14k
There’s been some confusion about the retirement plan aspects of the COVID-19 stimulus package signed into law on December 27, 2020.One national news network has reported that the new law extends the CARES Act tax breaks for coronavirus-related distributions (CRDs) into 2021. This is incorrect! At least for the moment, CRDs are no longer available.
Ah, the end of the year. Snow is drifting, music plays quietly in the background. Ma in her kerchief, Papa in his cap, just settling down for a long winter’s nap…Nope. No time for that. ‘Tis the season of BUSY, BUSY, BUSY!Did you write a check to a charity from your checkbook IRA in hopes that it would be a qualified charitable distribution (QCD) for 2020? If so, you better make sure the charity in fact CASHES the check before the end of the year.
We at the Slott Report would like to wish all our readers a happy and safe holiday season. 2020 has been a year like no other. Thank you for taking your valuable time to read the Slott Report during this challenging period.The end of the year is always a time to look back. 2020 has been a busy year at the Slott Report. In January, the SECURE Act became effective and changed the retirement account landscape.
Question:Hello,Can you still recharacterize a Roth contribution (due to income limits) to a Traditional IRA and then subsequently convert the IRA back to a Roth in the same year? Will this conflict with the new law that prohibits undoing a Roth conversion?Thanks you for your help,
Question:I am 79 and still employed. My employer has an SEP for me and I have a Rollover IRA from a previous employer. Can I transfer my Rollover IRA to the SEP account?Thank you,GeorgeAnswer:Hi George,There are no restrictions in the tax law against combining a SEP IRA and traditional IRA that contains funds rolled over from an employer plan.
