Archive for the ‘IRAs’ Category

IRA Enforcement Initiative

June 23, 2012

Let’s be honest: reports of the Treasury Inspector General for Tax Administration do not make for fascinating reading. And you are hearing this from someone who feasts on items like the new regulations dealing with portability of deceased spousal unused exclusion amount for estate and gift tax purposes. So hats off to Kelly Greene for an excellent article in the Wall Street Journal discussing how one of those reports appears likely to spur new enforcement efforts from the IRS in relation to IRAs. Among the issues:

  • Failure to take required minimum distributions after age 70½
  • Failure to complete a rollover within 60 days
  • Failure to comply with rules for inherited IRAs

In light of an expected increase in enforcement, this is a good time for taxpayers and their advisors to determine whether they have problems in this area and what corrective measures are appropriate.

What’s New in IRAs? Not Much

January 3, 2012
By Kaye A. Thomas

The IRS came out with its annual edition of Publication 590, Individual Retirement Arrangements (IRAs), earlier than usual this year. Most likely that’s because so few revisions were needed from the previous year. Sections describing what’s new for 2011, and for 2012, offer little more than a mention of the new figures for items that are adjusted annually for inflation. (These figures are available in our Reference Room.)

Taxpayers and return preparers should take note of one item affecting returs for 2011 and 2012, however. A special rule for Roth conversions in 2010 allowed the income from the conversion to be reported half in 2011 and half in 2012. You could also choose to report the conversion income on your 2010 return, but if you didn’t make that choice, you begin to pay the piper on your 2011 income tax return.

This rule applied only for Roth conversions that took place in 2010. If you did a Roth conversion in 2011, you have to report the income on your 2011 tax return.

Moving Your IRA? Keep it Simple

May 26, 2010

If you’re moving an IRA from one financial firm to another you have two choices. One is a rollover, which involves taking a distribution from the existing account and, within 60 days, depositing it in the new account. The other is a direct transfer, sometimes called a trustee-to-trustee transfer, where the money goes from the old firm to the new one, untouched by human hands. Other things being equal, this is the preferable choice. (more…)

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