Reply To: Please post an article on almost-repeal of the Stretch IRA

Home Fairmark Forum Retirement Savings and Benefits Please post an article on almost-repeal of the Stretch IRA Reply To: Please post an article on almost-repeal of the Stretch IRA

#3473
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Participant

At its simplest, what does, will, or might this mean for the individual with a solo 401(k) that has within it non-Roth and Roth components, who hopes to max the “stretch” for his/her non-spouse beneficiaries?

If for example there is to be a $400K cap per beneficiary and $500K in 401(k) funds were left to an inheritor, then what result?

The person with a 401(k) can invest in real estate without UBIT (UDFI) though the property they own has been mortgaged. When the property is inherited after the 401(k) owner dies, what happens to the gains – are they stepped up to the value at time of death? Under current tax law, What about the future tax treatment of the assets in the hands of the inheritor(s), e.g., will they be able to avoid UBIT if the assets in the 401(k) were acquired with Roth funds?

Do solo 401(k) “die” with the principle? Can they continue for the life of the spouse, especially if spouse was covered by 401(k) too?

Thanks for any answers.