Question:Hi,I have a client who died in 2021 before taking his 2021 RMD. He designated various charities as beneficiaries of his IRA.The IRA custodian is advising the executor to take the RMD, however according to a previous post by Mr. Slott, Revenue Ruling 2005-36 states in this scenario the RMD is to be paid to the beneficiaries. I suggested the client ask the custodian to request confirmation from their legal department. Any other steps?Thank you,LP
On July 15 and 16, financial advisors from around the country gathered virtually for Ed Slott and Company’s Instant IRA Success workshop. We took a deep dive into the rules governing retirement accounts and engaged in some lively discussions of issues that advisors on the front line are facing regularly as they help their clients plan for a secure retirement. Here are five takeaways to share from our recent meeting:
Question:Ed,I recently saw an email from you on QCDs when deductible IRA contributions are made in the same year. It discussed how these two transactions interact with each other.I am also wondering if the offset to the QCD would also occur for a SEP IRA or SIMPLE IRA contribution?Thank you for your help.
When you contribute to a traditional IRA you make a deal with Uncle Sam. You can get a tax deduction and tax deferral on any earnings in your IRA. However, eventually the government is going to want its share and will require funds to come out of these accounts. That is when you must start required minimum distributions (RMDs). You may not need the money and you may not want the tax hit. Here are some strategies that can help reduce your RMD.
Question:I rolled over an IRA in March 2021 from an TD Ameritrade institutional account to a TD Ameritrade retail account. I currently would like to do a 60-day short-term rollover. Would this not be allowed because of the one rollover per 12 month period or is a 60-day short-term rollover treated differently? Thank you for your time.
The pandemic has upended the workplace and caused many people to rethink their career path. For some older workers this may mean considering early retirement. For those workers, access to retirement savings can be key, and avoiding early distribution penalties is critical. While most distributions taken from a retirement account before age 59 ½ are subject to an early distribution penalty, the tax code carves out an exception for distributions from certain employer plans taken by those who are age 55 or older in the year they separate from employment. Here are 5 things you must know about the age-55 rule.
A client of mine born in 1952 passed away in March 2021 and the IRA passed to her mother who is 91 years old. So, the 10 year rule applies to liquidate the IRA as she is not an eligible designated beneficiary (EDB). If the mother passes away at age 95 and leaves the inherited IRA to her son – how long does the son have to liquidate the account???All the best
June is PRIDE Month. This June also marks the sixth anniversary of the landmark Supreme Court case Obergefell v. Hodges, which legalized same-sex marriage. In the wake of this decision, millions of same-sex couples headed to the alter over the past few years.Many of these newlyweds, never expecting to see a day when they would be allowed to marry, may not have paid much attention to the special breaks that married couples receive under the tax code. When it comes to IRA rules, spouses have many advantages, and couples in same-sex marriages are no exception. Here are four special IRA rules for spouses that same-sex couples should know about:
It has been well over a year since the SECURE Act became a reality, transforming the rules for inherited IRAs and doing away with the stretch IRA for most beneficiaries. While the SECURE Act statute gave us framework for the new rules, there are large gaps that need to be filled in and many unanswered questions remain.
Question:We have a client that owns two substantial IRA accounts plus a smaller beneficiary IRA. Does the beneficiary IRA have its own RMD rules (the client has owned it for 10 years and has been taking RMD’s from it based on the old stretch IRA rules)? Or can the beneficiary IRA be lumped together with the other IRA’s for RMD calculation purposes? If so, can this year’s total RMD be withdrawn from the beneficiary IRA without having to touch the other two IRA’s?
