Q:
Hello. I was
reading the
2/28/22 edition of
the Slott Report
and noticed the
section titled
“Beneficiaries Hit
w/Annual RMDs and
the 10-Year Rule.”
It was my
understanding that
starting 1/1/20,
most non-spouse
beneficiaries
would have 10
years from the
year of death to
distribute the
IRA, with no RMDs
required.Will
adult individuals
who inherit a
traditional IRA
from an
80-year-old parent
in 2020, for
example, now have
to start taking
annual RMDs, with
the remaining
balance withdrawn
in the 10th year?
Thank you!
Answer
Q:
Long time reader
and listener of
yours…and have
bought a few
copies of your
latest book to
share with
clients! Prior to
us being involved,
my client made a
backdoor Roth
contribution in
2021. He did this
despite his income
being below the
threshold limits.
Also, he had
existing IRA
balances. Is there
anything he can
do? Are the 2018
recharacterization
rules such that he
is stuck with any
tax implications?
Answer
Q: I do taxes
for an 80+ year old
lady with an IRA.
She said she never
received a letter
from the company she
has her IRA with to
let her know she
needed to take a
withdrawal for 2021.
The company, of
course, says they
did.I am trying to
find a way to
rectify this
situation. She is
filling out the
paperwork for the
2021 RMD, but
because she is two
months past the due
date, technically
she owes the
penalty. Should we
file her taxes for
2021 and just wait
for the IRS to catch
up with this?
Answer
Q:
I established a
Roth IRA in 2011
and needed to
withdraw $30,000
in 2021 to pay for
my daughter’s
first year of
college tuition. I
am under age 59
1/2 and the 1099-R
has a code of J
meaning early
distribution and
no known
exception. Will my
distribution,
therefore, be
fully taxable and
will I have to pay
the 10% early
withdrawal
penalty? I was
told by the
company holding my
Roth IRA that it
would be a fully
NON-taxable
distribution and
no penalty as it
was used for
educational
purposes. Please
advise. Thank you.
Answer
Q: I have a
client that needs
funds for a short
period of time, so
he plans to use the
60-day rollover rule
to borrow money from
his IRA and return
it within 60 days.
He has a Traditional
IRA and a Roth IRA.
He is under the
impression he can do
a 60-day rollover
for each account. My
understanding is
that he can only do
one 60-day rollover
regardless of
account type during
any 365-day period,
so he can only take
funds from his IRA
or Roth, but not
both. Am I correct?
Answer
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