This week's Slott Report Mailbag looks at the delicate situation of moving retirement funds (either to another account or through distributions) when still employed. If you are nearing retirement and are looking long-term of your overall plan, these two questions could be applicable to your situation.
You are not allowed to invest your IRA money in collectibles such as artwork, rugs, stamps, gems, alcoholic beverages such as fine wine, and antiques. If you invest any part of your IRA in a collectible, you will get a tax bill for it. The Tax Code treats your investment in a collectible as a distribution, which means it’s taxable to you. Also, if you’re under age 59 ½ at the time of the investment, the deemed distribution will be subject to the 10% early distribution penalty tax too. The entire value of your IRA is not deemed distributed to you, only the amount invested in the collectible is taxable.
This week's Slott Report Mailbag looks at how long you have to store year-end retirement account statements as well as how a spousal beneficiary should do if he or she decides to leave a deceased spouse's IRA separate from their own. Click to read this week's Q&A with our IRA Technical Consultant.
If you participate in a company retirement plan, such as a 401(k), there's a way you can take a distribution and get out of paying the 10% early distribution penalty if you're under age 59 ½ at the time of the withdrawal. The rule is sometimes called the “age 55 rule.” Click to learn more about this rule.
This week's Slott Report Mailbag looks at potential annuities that can be rolled over to IRAsas well as a follow-up question on a younger spouse inheriting an IRA. Click to read this week's Q&A with our IRA Technical Consultant.
You're allowed to name anyone as the beneficiary of your IRA. You’re also allowed to name a non-person as your IRA beneficiary. Examples of non-persons would include charities, a trust, or your estate. It is generally not a good move to name your estate as your IRA beneficiary.When you die, your estate includes the property that you owned at the time you died. It’s a legal entity that’s created after you die. Your executor must then pay your expenses and liabilities and distribute the balance according to your will.
A taxpayer learned a costly lesson recently when he forgot to complete an IRA rollover within the 60-day time fame. He asked the IRS for more time to do the rollover, but they turned him down. As a result, his IRA distribution couldn’t be rolled over tax-free so that meant his IRA distribution was taxable.
You want to make a contribution to a Roth IRA for 2014. As long as you’re working and have compensation (earned income) you can potentially make a Roth IRA contribution of up to $5,500 if you’re under age 50 or $6,500 if you’re age 50 or older this year.
There is a one-rollover-per-year rule that applies to IRA distributions. IRA-to-IRA or Roth IRA-to-Roth IRA rollovers are subject to the once-per-year rule. The account owner can only rollover IRA funds once every 12 months. The 12-month period is a full 12 months. Click to read about exceptions to the Once-Per-Year IRA Rollover Rule.
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