Question:
Can you please tell me if a client can transfer her required minimum distribution (RMD) to a 529 plan for a grandchild’s college and avoid paying income tax on it similar to a transfer to a qualified charity?
Thanks,
Question:
Greetings,
If I have the beneficiaries on my IRA listed as my wife (50%) and two children over 21 (50%), is my wife still able to move her half of the IRA into her existing IRA when I am gone? Or does having the adult children as partial beneficiaries inhibit her ability to do a spousal rollover to combine it with her existing IRA?
Are you thinking of naming a child or grandchild as your IRA beneficiary? With the start of the SECURE Act in January 2020, the rules for inherited IRAs were upended. Prior to the enactment of the SECURE Act, naming a minor as a beneficiary was a good way to take advantage of the stretch IRA. A grandparent could name a young grandchild as their IRA beneficiary and distributions could be paid from the inherited IRA for decades over the long life expectancy of the beneficiary.
Probably the biggest advantage that a spouse beneficiary of an IRA has over other beneficiaries is the ability to do a spousal rollover. Only a spouse beneficiary can do a spousal rollover. Nonspouse beneficiaries do not have this option. With a spousal rollover, inherited retirement account funds become the spouse beneficiary’s own.
Over the past couple of months I have been tasked with the unfortunate responsibility of helping my mother sort through her financial affairs after the death of her spouse. My dad passed in March, and it has been a steady stream of questions, conference calls with her financial advisor and one important decision after another. Of course, this doesn’t even scratch the surface of the emotional stress and strain on the family.
Question:
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.
Question:
I have a client, age 65, who passed away and left her IRA to her estate. Two nephews and a niece are beneficiaries of the estate. Is there a way to add beneficiaries after her passing?
I spoke with a financial company, and they said you need some type of court order or ruling to allow this.
Question:
I hope you can help me with this, as I cannot find the answer anywhere or from anyone.
In 2019, my client Frank, passed away. His cousin, Lisa, inherited his IRA. In 2020, Lisa passed away. Her husband, Rob, inherited the IRA. They are all the same age.
Trick-or-treating in the time of a pandemic is a challenge. Social distancing while handing out candy requires some creativity. The Slott Report has elected to place a big bowl of random treats in front of our house for the kids to pick from. We bought a lot of candy, so feel free to take more than one…
Twix. Do not name your estate as your IRA beneficiary.
Question:
Could you please direct me to information that tells me how any conversions I make from my regular IRA to a Roth will be taxed. My belief was that the amount of any conversion will be taxed at whatever my tax bracket is for the year in which I make the conversion. Is that correct? Therefore, all other things being equal, it is preferable to make the conversion in years where my tax bracket is lower.
Thanks for your help.
Joann
Answer:
Joann,
You are 100% correct. Any conversion from a traditional to a Roth IRA will be taxed at your tax bracket for the year in which you make the conversion. (One is not allowed to make a “prior year conversion.”) As for your second comment – also yes.
