The Slott Report

One piece of advice we commonly reiterate is, when you inherit an IRA or other retirement plan asset, touch nothing! That’s because many transactions cannot be undone, and the IRS rarely grants relief simply because the taxpayer misunderstood the tax rules. That said, you don’t want to remain stagnant forever. We were reminded of this in a recent private letter ruling approving a proactive approach by trust beneficiaries that saved the stretch distribution.

It turns out the Grinch stirs up a blizzard of trouble beyond stealing Christmas trees and presents from the innocent Whos down in Whoville. That candy cane he slipped out of Cindy Lou’s fingers? Child’s play. The breadcrumb he stole from the hungry Who mouse? Just the tip of his naughty iceberg of misdeeds and bad retirement advice. He’s an account-churning, RMD-avoiding, tax-scheming thief! An excess-contributing, high-pressure selling, rollover cheat! Oh, you ARE a mean one, Mr. Grinch. In an effort to protect the other Whos in Whoville, we share the top 3 most foul Grinch-recommended year-end IRA strategies that unequivocally, unmistakably and inevitably will NOT work:

Good morning! I am hoping you can provide some direction for an issue we have encountered. In December of 2016, we changed our broker-dealer. A particular client had not completed the transfer paperwork and had to mail a check to the IRA custodian directly for their 2016 contribution. The client had mailed the check prior to April 18, 2017, which was the deadline for the 2016 IRA contribution. The check was dated for 04/18/2017. The custodian has incorrectly coded the check for the current year (2017), and it should have been for prior year 2016. The custodian is not allowing the coding to be corrected, which the client is stating they are now subject to fines. Is there a way this client can dispute this issue, or can you please offer any advice? Thank you!

Twenty-six states have adopted revocation-on-divorce statutes similar to each other, and these statutes are impacting court decisions.

If you are thinking about doing a qualified charitable distribution (QCD) for 2018, time is running out. The deadline is December 31, 2018. Many people are missing out on this valuable tax break.

Tim and Robert are identical twins. They wear the same clothes. They have similar hair styles. They have similar jobs and similar incomes. Tim and Robert are both concerned about taxes, and they agree that saving money for the future is very important.

Thanksgiving is only a few days away. This is a time when we gather together and express our gratitude for all the good things in our lives. When it comes to our retirement accounts, we too often complain about the negatives, such as the restrictions that are not logical and the complicated and confusing rules.

I am 70 ½ and still working in 2018. If I work part time (still employed) in 2019, can I delay my 401K RMD until 2020? Best regards,

There is a 131-page bill currently working its way through the U.S. legislature. The proposal would amend the Internal Revenue Code and encourage retirement savings. While the “Retirement Enhancement and Savings Act of 2018,” or RESA, still needs to make it through Congress – potentially before year end – it has strong tailwinds.

The road to retirement is long. Along the way you may need to move the funds in your IRA. When that time comes, you will want to be sure that everything is done correctly. Moving your retirement funds can be tricky and the consequences of a mistake can be serious.