Question:My client’s husband recently passed away. We have converted her late husband’s 401(k) to a beneficiary 401(k) in preparation for transferring it to a beneficiary (inherited) IRA. There is company stock inside the 401(k) currently. We want to leverage the NUA (net unrealized appreciation) tax strategy. Is stock inside a beneficiary 401(k) eligible for NUA, the same as the stock would have been when he was alive?All the best,
Question:My client’s husband recently passed away. We have converted her late husband’s 401(k) to a beneficiary 401(k) in preparation for transferring it to a beneficiary (inherited) IRA. There is company stock inside the 401(k) currently. We want to leverage the NUA (net unrealized appreciation) tax strategy. Is stock inside a beneficiary 401(k) eligible for NUA, the same as the stock would have been when he was alive?All the best,
Question:In 2020 and 2021, when I was over 65 years old, I converted some of my IRA into a Roth IRA. Does the five-year rule still apply to me, or can I now draw out all of the Roth IRA without any tax consequences?
Question:Dear Mr. Slott,I made $40,000 additional non-deductible (after taxes) contributions to my IRA many years ago. I have filed IRS Form 8606 every year informing the IRS of the contributions. I would like to withdraw the $40,000 this year so that when I have to take my RMDs next year, the reporting to the IRS will be simpler.
Within the 400-page Ed Slott advisor training manual, we include a basic chart that outlines the Roth IRA distribution ordering rules and the availability of those specific dollars. When presenting the material to a live audience, I always say it is my favorite page.
You may not be familiar with the tax code’s “same-property rule” that applies to IRA-to-IRA (and Roth IRA-to-Roth IRA) rollovers. The rule requires that the property received in an IRA distribution must be the same property that is rolled over. If you receive cash, you have to roll over cash.
The once-per-year IRA rollover rule sounds pretty easy to understand. You may only do one IRA-to-IRA (or Roth IRA-to-Roth IRA rollover) per year (365 days). However, this rule is often misunderstood.One common confusion about the once-per-year rollover rule is whether multiple distributions or multiple deposits will trip you up.
I earn too much money and can’t do a Roth IRA. I have heard about the back-door Roth IRA strategy for those who earn more than the allowable contribution for the Roth IRA where they contribute to a traditional IRA and then roll over to a Roth IRA.
The Investment Company Institute (ICI) is an association representing mutual fund companies and similar investment companies. Each year, ICI conducts a survey of the prevalence of IRAs in American households.
QUESTION:On September 6th in a piece titled, “Rules for Inherited IRAs that May Surprise Nonspouse Beneficiaries,” Sarah Brenner from Ed Slott and Company wrote, “If you inherited the IRA funds in 2020 or later, as a nonspouse beneficiary you will most likely be subject to a 10-year payout-period, possibly with annual RMDs during the 10-year period.”My brothers and sisters and I are non-spousal beneficiaries, and my understanding is that there is no rule or code yet that states we must take some out of the inherited IRA account each year, only that it must be drained by end of the tenth year as required by the SECURE Act. My sibling says we must take some each year. Which of us is correct? We are all under the RMD age, in our sixties and our parents passed September of 2022.
