INHERITED IRAS AND NET UNREALIZED APPRECIATION: TODAY’S SLOTT REPORT MAILBAG
QUESTION: I inherited both a traditional and a Roth IRA from my significant other (non-spouse) who passed away in 2021. He had started taking required minimum distributions (RMDs). I am less than 10 years younger than he was. Question is: do I or do I not have to empty both accounts within 10 years […]
NEW RMD REGS HAVE A SURPRISING RESULT FOR MINOR CHILD BENEFICIARIES
In newly released final required minimum distribution (RMD) regulations, the IRS is doubling down on its position that annual RMDs are required for some beneficiaries during the SECURE Act’s 10-year payout period. This rule has a surprising result for minor children who inherit an IRA from a parent. The RMD regulations say that if […]
PART 2: INHERITED ROTH IRA BY SPOUSE BENEFICIARY – 5-YEAR CLOCK ISSUES?
In Part 1 (July 17), I discussed 5-year clock issues when a non-spouse beneficiary inherits a Roth IRA. In Part 2, I will hit on the important concepts and options available when a spouse inherits a Roth IRA. Keep as Inherited Roth IRA. If a spouse is under age 59 ½ when she inherits, she […]
ROTH IRA ROLLOVERS AND REQUIRED MINIMUM DISTRIBUTIONS: TODAY’S SLOTT REPORT MAILBAG
Question: Can a Roth IRA be rolled into a Roth 401k? Answer: While a Roth 401(k) can be rolled into a Roth IRA, the reverse is not true. You cannot roll a Roth IRA into a Roth 401(k). The only place where funds from a Roth IRA can be rolled over to is another […]
HOW ARE ANNUAL RMDS IN THE 10-YEAR PERIOD CALCULATED?
In the July 22, 2024 Slott Report, my colleague Sarah Brenner explained how the IRS, in its final SECURE Act required minimum distribution (RMD) regulations issued on July 18, did not budge on a controversial position it had taken in its 2022 proposed regulations. The issue is whether a retirement account beneficiary subject to the 10-year […]
REQUIREMENT DURING 10-YEAR RULE STANDS
On July 18, 2024, the IRS issued final required minimum distribution (RMD) regulations under the 2020 SECURE Act. The newly issued regulations fine-tune existing rules for trust beneficiaries and aggregation of RMDs. They also eliminate burdensome rules for certain spouse beneficiaries and documentation requirements for certain IRA beneficiaries. However, the 260 pages of final regulations […]
ROTH CONVERSIONS AND SIMPLE IRA RMDS: TODAY’S SLOTT REPORT MAILBAG
Question: One of our clients wants to cash out his IRA and then roll it into a Roth IRA within 60 days. Can this be done directly, or does it have to be rolled back into an IRA first and then converted? Thanks, Samuel Answer: Hi Samuel, A Roth conversion can be done through a […]
IRS “HYPOTHETICAL RMD RULE” PREVENTS SURVIVING SPOUSES FROM AVOIDING RMDS
One of the more interesting rules (if any could be called “interesting”) from the 2022 IRS proposed regulations requires spouse beneficiaries in some situations to take RMDs (required minimum distributions) before doing a spousal rollover. The IRS calls these RMDs “catch-up” or “hypothetical” RMDs. At first, it was hard to figure out where the IRS […]
SIMPLE IRA RMDS AND IRS LIFE EXPECTANCY TABLES: TODAY’S SLOTT REPORT MAILBAG
Question: Does a SIMPLE IRA owner who is over age 73 and still works for the same company that sponsors the SIMPLE IRA plan have to take an RMD (required minimum distribution)? He does not own any of the company. Answer: Yes. SIMPLE and SEP IRA owners cannot use the “still-working exception” to delay RMDs […]
A WISH LIST FOR THE IRS BENEFICIARY RMD FINAL REGULATIONS
After more than two years, we might actually soon be getting answers from the IRS on several important unanswered questions concerning required minimum distributions (RMDs) for those who inherit IRAs or company plan accounts. The 2019 SECURE Act completely changed the RMD rules for many beneficiaries of retirement accounts. Previously, any individual living beneficiary could […]