A taxpayer can use either cash or property to make a charitable gift. That choice can affect the taxpayer’s overall tax consequences resulting from the gift. For example, a charitably inclined taxpayer may derive greater tax benefits from gifting property to charity rather than selling the property and gifting the proceeds. In addition, consideration should be given to gifting property with unrealized appreciation to maximize the economic benefit from disposing of the property.
Cash contributions are deductible in the year paid. A contribution generally is considered made at the time of delivery. Thus, contributions paid by check are considered made on the date of delivery or mailing (assuming the check subsequently clears in due course).
Contributions charged to a bank credit card are deductible in the year the charge is incurred, even though paid in a later year. However, interest paid on the credit card balance is not considered a charitable contribution. Charitable contributions made by credit card may be useful for a taxpayer who anticipates a greater benefit from the contribution in the current year, yet needs to defer payment until the next year.
Promissory notes given to charity generally do not constitute a charitable contribution until paid.
Transferring cash is the simplest way to make a tax-deductible donation. Unlike property, the value of a cash donation is not subject to IRS challenge. Costs associated with transferring title to property are avoided. Also, property donations by individuals may be more limited under the percentage-of-AGI limitations than cash donations. Finally, cash is generally a suitable gift for any recipient. Property donations may not always be exactly what the recipient organization needs. In fact, some property donations may cause the donee to incur costs trying to sell them or adapt them to a specific use.
The price for simplicity is giving up cash, which is not possible for all donors. A donor may prefer to donate property that is not producing current income, since he or she suffers no loss of income. A property donation may also be attractive to an owner of illiquid property or low tax basis property.
Please contact us if you have questions concerning charitable deductions and for additional tax-saving guidance.
Monday, October 25, 2010
529 Plans — College Savings for Your Children
Many parents and grandparents are using 529 Plans to fund their children’s and grandchildren’s education. However, 529 Plans are somewhat confusing because they are subject to Internal Revenue Code qualification requirements, but are operated by the various states or educational institutions under varying policies defined by them. 529 Plans established by the states come in two basic formats: (a) prepaid tuition plans and (b) savings plans. (Eligible educational institutions can only establish prepaid tuition plans; these institutions cannot set up savings plans.) Every state offers at least one 529 Plan.
A prepaid tuition plan is best thought of as a way to lock in the price of covered educational services at today’s prices, thus insuring against college cost inflation. The tax benefits are a nice bonus. In contrast, a savings plan is best thought of as a tax-advantaged way to build up a college fund. Savings plans do not lock in the cost of covered educational services. The federal tax advantages for both types of plans are identical. Each type of plan generally allows both one-time (lump sum) and periodic contributions. Since each state plan is unique, each one must be analyzed in terms of the student’s needs.
Many factors should be considered before opening a 529 Plan account. For many individuals, especially those whose children or grandchildren are years away from college, the savings plans generally will be the better choice. However, the volatility of the stock market, including years of negative returns, has renewed interest in prepaid tuition programs. Prepaid plans might be appropriate in certain circumstances, particularly for those with low risk tolerance or those who want to be guaranteed a certain amount of education credits or units. Whichever route is taken, it is important to review all of the program details, including investment options, fees, and state income tax consequences.
When a state income tax applies, individuals typically should look at their own state program first, as the state income tax consequences might make it more favorable than others. However, many individuals may find that out-of-state programs better meet their needs and objectives. Some families choose to open both a prepaid plan for the cost certainty and a savings plan for the growth potential.
Prepaid tuition plans allow individuals (generally parents) to prepay the education costs of a designated beneficiary (generally their child) at specified institutions and thereby lock in the price. The prepayments are invested by the 529 Plan. In effect, the investment return is guaranteed to keep pace with inflation in the cost of the covered educational services—nothing more; nothing less. Even if the plan’s conservative investments post inadequate returns, there is no obligation to make further payments. However, if the 529 Plan earns more than enough to finance the cost of the covered educational services, the plan gets to keep the excess. In either case, once college time arrives, the covered costs of the designated beneficiary will be paid for by the 529 Plan.
Unlike prepaid tuition plans, 529 savings plans make no promises that contributions will cover a given amount of future college education. As their name implies, savings plans simply provide tax-favored savings accounts for higher education expenses.
The bad news is that savings plans are not a surefire hedge against college cost inflation. The good news is that these plans allow upside potential. If the savings plan’s investment return exceeds the rate of inflation for college costs, less money is needed to fund the account. Basically, the account owner decides how much to contribute to the savings plan, chooses among the plan’s investment options, and then monitors performance. At college time, the account is drawn down to pay some or all of the designated beneficiary’s eligible expenses.
When determining the impact 529 Plans have on a student’s financial aid offer, it is important to recognize that how the 529 Plan is owned (titled) can impact the financial aid computations in two ways. First, it may be an asset that can be assessed in the financial aid computation. Second, withdrawals from the 529 Plan may be treated as a resource that has a direct impact on the student’s financial need (as an outside scholarship would).
Qualified distributions from state-sponsored 529 Plans and institutional programs are completely tax-free. Qualified distributions are distributions for qualified higher education expenses, including tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. A beneficiary with special needs can also include the expenses of special needs services as qualified expenses.
Finally, 529 Plans may be particularly attractive to higher income parents and grandparents because there are no AGI-based limitations on who can contribute to these plans. In addition, the federal income and estate tax aspects generally are favorable with 529 Plans.
A prepaid tuition plan is best thought of as a way to lock in the price of covered educational services at today’s prices, thus insuring against college cost inflation. The tax benefits are a nice bonus. In contrast, a savings plan is best thought of as a tax-advantaged way to build up a college fund. Savings plans do not lock in the cost of covered educational services. The federal tax advantages for both types of plans are identical. Each type of plan generally allows both one-time (lump sum) and periodic contributions. Since each state plan is unique, each one must be analyzed in terms of the student’s needs.
Many factors should be considered before opening a 529 Plan account. For many individuals, especially those whose children or grandchildren are years away from college, the savings plans generally will be the better choice. However, the volatility of the stock market, including years of negative returns, has renewed interest in prepaid tuition programs. Prepaid plans might be appropriate in certain circumstances, particularly for those with low risk tolerance or those who want to be guaranteed a certain amount of education credits or units. Whichever route is taken, it is important to review all of the program details, including investment options, fees, and state income tax consequences.
When a state income tax applies, individuals typically should look at their own state program first, as the state income tax consequences might make it more favorable than others. However, many individuals may find that out-of-state programs better meet their needs and objectives. Some families choose to open both a prepaid plan for the cost certainty and a savings plan for the growth potential.
Prepaid tuition plans allow individuals (generally parents) to prepay the education costs of a designated beneficiary (generally their child) at specified institutions and thereby lock in the price. The prepayments are invested by the 529 Plan. In effect, the investment return is guaranteed to keep pace with inflation in the cost of the covered educational services—nothing more; nothing less. Even if the plan’s conservative investments post inadequate returns, there is no obligation to make further payments. However, if the 529 Plan earns more than enough to finance the cost of the covered educational services, the plan gets to keep the excess. In either case, once college time arrives, the covered costs of the designated beneficiary will be paid for by the 529 Plan.
Unlike prepaid tuition plans, 529 savings plans make no promises that contributions will cover a given amount of future college education. As their name implies, savings plans simply provide tax-favored savings accounts for higher education expenses.
The bad news is that savings plans are not a surefire hedge against college cost inflation. The good news is that these plans allow upside potential. If the savings plan’s investment return exceeds the rate of inflation for college costs, less money is needed to fund the account. Basically, the account owner decides how much to contribute to the savings plan, chooses among the plan’s investment options, and then monitors performance. At college time, the account is drawn down to pay some or all of the designated beneficiary’s eligible expenses.
When determining the impact 529 Plans have on a student’s financial aid offer, it is important to recognize that how the 529 Plan is owned (titled) can impact the financial aid computations in two ways. First, it may be an asset that can be assessed in the financial aid computation. Second, withdrawals from the 529 Plan may be treated as a resource that has a direct impact on the student’s financial need (as an outside scholarship would).
Qualified distributions from state-sponsored 529 Plans and institutional programs are completely tax-free. Qualified distributions are distributions for qualified higher education expenses, including tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. A beneficiary with special needs can also include the expenses of special needs services as qualified expenses.
Finally, 529 Plans may be particularly attractive to higher income parents and grandparents because there are no AGI-based limitations on who can contribute to these plans. In addition, the federal income and estate tax aspects generally are favorable with 529 Plans.
Year-end Tax Planning
There's still time to lower your 2010 tax bill, contribute to your tax-advantaged retirement accounts, and do some tax planning for next year.
Following, are a few ideas to get you started prior to year-end.
Contribute to Your IRA. You can contribute up to $5,000 ($6,000 if you are age 50 or older by year-end) to your IRA in 2010 if certain conditions are met. For married couples, the combined contribution limits are $10,000 ($5,000 each) and $12,000 ($6,000 each if both are age 50 by year-end) when a joint return is filed, provided one or both spouses had at least that much earned income. These limits apply to the cumulative contributions to traditional and Roth IRAs. In addition, contributions to traditional IRAs may be tax deductible, subject to specific conditions and limitations.
Contribute to Your Employer-Sponsored Retirement Plan. The 2010 annual deferral limit for qualified retirement plans is $16,500. If you are at least age 50 by year-end, you can contribute an additional $5,500 to 401(k), 403(b), and 457 plans. These contributions normally decrease your taxable income and the income taxes thereon.
Capital Gains. It may be a good time to consider selling capital assets (e.g., common stock) with a low cost basis. The maximum capital gains tax rate in 2010 is 15% for gains from the sale of qualifying assets held more than one year. In fact, taxpayers in the 10% and 15% ordinary tax brackets can do even better by taking advantage of the 0% capital gains rate in 2010. In addition, qualifying dividends received during 2010 generally will be taxed at the 0% or 15% capital gains rates.
Energy Credit. If you have not taken advantage of the Nonbusiness Energy Property Credit available in 2009 and 2010, it is a great way to cut energy costs and save up to $1,500 (for both years combined) in income taxes by making energy efficiency improvements to your principal residence. Basically, if you install energy-efficient insulation, windows, doors, roofs, heat pumps, hot water heaters or boilers, or advanced main air circulating fans to your home before year-end, you may be entitled to a tax credit of 30% of the purchase price, up to a maximum credit of $1,500.
Please contact us for additional tax-saving ideas or guidance on tax-related questions.
Following, are a few ideas to get you started prior to year-end.
Contribute to Your IRA. You can contribute up to $5,000 ($6,000 if you are age 50 or older by year-end) to your IRA in 2010 if certain conditions are met. For married couples, the combined contribution limits are $10,000 ($5,000 each) and $12,000 ($6,000 each if both are age 50 by year-end) when a joint return is filed, provided one or both spouses had at least that much earned income. These limits apply to the cumulative contributions to traditional and Roth IRAs. In addition, contributions to traditional IRAs may be tax deductible, subject to specific conditions and limitations.
Contribute to Your Employer-Sponsored Retirement Plan. The 2010 annual deferral limit for qualified retirement plans is $16,500. If you are at least age 50 by year-end, you can contribute an additional $5,500 to 401(k), 403(b), and 457 plans. These contributions normally decrease your taxable income and the income taxes thereon.
Capital Gains. It may be a good time to consider selling capital assets (e.g., common stock) with a low cost basis. The maximum capital gains tax rate in 2010 is 15% for gains from the sale of qualifying assets held more than one year. In fact, taxpayers in the 10% and 15% ordinary tax brackets can do even better by taking advantage of the 0% capital gains rate in 2010. In addition, qualifying dividends received during 2010 generally will be taxed at the 0% or 15% capital gains rates.
Energy Credit. If you have not taken advantage of the Nonbusiness Energy Property Credit available in 2009 and 2010, it is a great way to cut energy costs and save up to $1,500 (for both years combined) in income taxes by making energy efficiency improvements to your principal residence. Basically, if you install energy-efficient insulation, windows, doors, roofs, heat pumps, hot water heaters or boilers, or advanced main air circulating fans to your home before year-end, you may be entitled to a tax credit of 30% of the purchase price, up to a maximum credit of $1,500.
Please contact us for additional tax-saving ideas or guidance on tax-related questions.
Monday, October 4, 2010
Revocable Living Trusts
Living trusts remain a popular and affordable estate planning vehicle. A revocable (or living) trust is a trust that is funded with part or all of the property of the creator (grantor) of the trust. By serving as trustee, the grantor retains control of the property and also has the right to revoke the trust and reclaim ownership of the trust’s property. By itself, the trust does not offer any estate tax savings, since the trust assets remain in the donor's taxable estate. However, if it is properly set up and funded, it can provide several advantages, including the following:
Avoiding Probate. In states where executor fees and attorney fees are based on a percentage of a person’s estate that goes through probate, a living trust can cut costs significantly because assets owned by the trust are not subject to the probate process.
Asset Administration. Another benefit of a living trust is that it can help avoid a court-supervised guardianship in the event the trust creator becomes unable to manage his or her own affairs. Of course, if the only reason for creating the trust is to avoid a guardianship proceeding, it may be simpler (and cheaper) to grant a durable power of attorney over all of one’s assets to a trusted relative or friend, rather than to establish the trust.
Multi-state Administration. An ancillary administration (meaning administration of a person’s estate in more than one state) is necessary when individuals own real property outside their state of residence. In some situations, this process is fairly simple; other times it is not. As an alternative to an ancillary administration, a living trust can be established to hold title to the property located in another state.
Privacy. An inventory of assets generally must be filed in a probate administration. This document becomes a matter of public record, subject to inspection by anyone. Thus, individuals who are concerned about the privacy of their financial affairs can use a fully funded living trust to prevent a public record of their assets at death.
Although a revocable living trust can be a valuable planning tool, it’s certainly not for everyone. For example, the benefits of the trust normally are not fully realized unless all of a person’s assets are placed in the trust. Some people will find the inconvenience of having assets such as cars, boats, homes, and checking accounts titled in the name of the trust rather than their own name too much to deal with on a day-to-day basis. Thus, they’ll either not bother to properly fund the trust when it is set up, or as the years go by, they’ll become remiss in maintaining the proper paperwork.
Please do not hesitate to contact us if you have questions concerning a living trust.
Avoiding Probate. In states where executor fees and attorney fees are based on a percentage of a person’s estate that goes through probate, a living trust can cut costs significantly because assets owned by the trust are not subject to the probate process.
Asset Administration. Another benefit of a living trust is that it can help avoid a court-supervised guardianship in the event the trust creator becomes unable to manage his or her own affairs. Of course, if the only reason for creating the trust is to avoid a guardianship proceeding, it may be simpler (and cheaper) to grant a durable power of attorney over all of one’s assets to a trusted relative or friend, rather than to establish the trust.
Multi-state Administration. An ancillary administration (meaning administration of a person’s estate in more than one state) is necessary when individuals own real property outside their state of residence. In some situations, this process is fairly simple; other times it is not. As an alternative to an ancillary administration, a living trust can be established to hold title to the property located in another state.
Privacy. An inventory of assets generally must be filed in a probate administration. This document becomes a matter of public record, subject to inspection by anyone. Thus, individuals who are concerned about the privacy of their financial affairs can use a fully funded living trust to prevent a public record of their assets at death.
Although a revocable living trust can be a valuable planning tool, it’s certainly not for everyone. For example, the benefits of the trust normally are not fully realized unless all of a person’s assets are placed in the trust. Some people will find the inconvenience of having assets such as cars, boats, homes, and checking accounts titled in the name of the trust rather than their own name too much to deal with on a day-to-day basis. Thus, they’ll either not bother to properly fund the trust when it is set up, or as the years go by, they’ll become remiss in maintaining the proper paperwork.
Please do not hesitate to contact us if you have questions concerning a living trust.
Retirement Catch-up Contributions
Tax law changes made back in 2001 established the right to make additional catch-up contributions to certain types of tax-advantaged retirement accounts. For 2010, this opportunity may be available to you if you will be age 50 or older as of year-end. Specifically, you can potentially make additional salary reduction catch-up contributions to a 401(k) plan, 403(b) plan, 457 plan, or SIMPLE plan (assuming you participate in a plan that allows catch-up contributions). These contributions reduce your taxable income and therefore result in lower income tax bills. You can also make catch-up contributions to a traditional IRA (which may or may not be deductible depending on your circumstances) and to a Roth IRA. (Roth IRA contributions are always nondeductible, but they can be a good idea if you expect higher future tax rates.)
These catch-up contributions are above and beyond the “normal” annual contribution limits that otherwise apply to your tax-advantaged retirement accounts. The maximum allowable catch-up contribution for 2010 is $5,500 for 401(k), 403(b), and 457 plans. It is $2,500 for SIMPLE plans and $1,000 for traditional and Roth IRAs. However, depending on your salary level and the terms of your salary reduction plan, maximum allowed catch-up contributions to the plan could be less than the amounts shown here. How much are the catch-up contributions worth? The beneficial long-term impact of making catch-up contributions is illustrated below. Remember, allowable catch-up contributions are now much bigger than back in 2002 when first allowed. For example, the maximum catch-up contribution to a 401(k) account for 2002 was only $1,000 versus $5,500 for 2010. The maximum catch-up contribution to a traditional or Roth IRA for 2002 was only $500 versus $1,000 for 2010. Therefore, you should now give catch-up contributions more respect than you might have earlier.
The following analysis proves the point.
These catch-up contributions are above and beyond the “normal” annual contribution limits that otherwise apply to your tax-advantaged retirement accounts. The maximum allowable catch-up contribution for 2010 is $5,500 for 401(k), 403(b), and 457 plans. It is $2,500 for SIMPLE plans and $1,000 for traditional and Roth IRAs. However, depending on your salary level and the terms of your salary reduction plan, maximum allowed catch-up contributions to the plan could be less than the amounts shown here. How much are the catch-up contributions worth? The beneficial long-term impact of making catch-up contributions is illustrated below. Remember, allowable catch-up contributions are now much bigger than back in 2002 when first allowed. For example, the maximum catch-up contribution to a 401(k) account for 2002 was only $1,000 versus $5,500 for 2010. The maximum catch-up contribution to a traditional or Roth IRA for 2002 was only $500 versus $1,000 for 2010. Therefore, you should now give catch-up contributions more respect than you might have earlier.
The following analysis proves the point.
New Business Tax Saving Opportunity
As you may be aware, gains and losses on sales of corporate stock generally are treated as capital gains and losses. Although capital gains are potentially taxed at preferential rates, capital losses are usually unattractive because the losses can only offset capital gains plus $3,000 ($1,500 if married filing separate) of ordinary income (from wages, dividends, interest, etc.). Any remaining balance is carried over to future years. Thus, if you realize large capital losses but no capital gains, the tax benefit of the capital losses may have to be spread over many years.
There is a tax provision, however, that allows you to treat losses incurred from the sale of qualified corporate stock as ordinary (rather than capital) losses. That is beneficial because an ordinary loss offsets ordinary income. The deductible ordinary loss for this provision is subject to an annual limitation of $50,000 ($100,000 if you file a joint return).
Of course, you don’t intend for your new business to generate a loss. However, this tax provision (known as the Section 1244 stock provision) is like insurance—you hope you will not need it but it is nice to have just in case. Any gain realized on the sale of Section 1244 stock is considered capital gain. However, losses realized are characterized as ordinary losses. Thus, there is really no downside to qualifying for Section 1244 treatment if your initial capital structure can be set up to meet the requirements.
Only original owners of the corporate stock are eligible for Section 1244 treatment. To qualify as Section 1244 stock, your new business must be a U.S. corporation (including an S corporation) and it must have no more than $1 million in capitalization at the time the stock is issued. The stock must be issued to an individual or partnership in exchange for money or property (other than stock or securities). Stock issued in exchange for services will not qualify. In addition, the corporation generally must derive more than half of its gross receipts from noninvestment activities for a specified period (generally, five years) before the year the stock is disposed of at a loss.
Note that individuals purchasing the stock of an existing corporation are not entitled to Section 1244 treatment since they are not the original owner of the stock. In this situation, investors can purchase the corporation’s assets and transfer them to a new corporation that is eligible for Section 1244 treatment.
Please contact us to discuss Section 1244 stock benefits and requirements.
There is a tax provision, however, that allows you to treat losses incurred from the sale of qualified corporate stock as ordinary (rather than capital) losses. That is beneficial because an ordinary loss offsets ordinary income. The deductible ordinary loss for this provision is subject to an annual limitation of $50,000 ($100,000 if you file a joint return).
Of course, you don’t intend for your new business to generate a loss. However, this tax provision (known as the Section 1244 stock provision) is like insurance—you hope you will not need it but it is nice to have just in case. Any gain realized on the sale of Section 1244 stock is considered capital gain. However, losses realized are characterized as ordinary losses. Thus, there is really no downside to qualifying for Section 1244 treatment if your initial capital structure can be set up to meet the requirements.
Only original owners of the corporate stock are eligible for Section 1244 treatment. To qualify as Section 1244 stock, your new business must be a U.S. corporation (including an S corporation) and it must have no more than $1 million in capitalization at the time the stock is issued. The stock must be issued to an individual or partnership in exchange for money or property (other than stock or securities). Stock issued in exchange for services will not qualify. In addition, the corporation generally must derive more than half of its gross receipts from noninvestment activities for a specified period (generally, five years) before the year the stock is disposed of at a loss.
Note that individuals purchasing the stock of an existing corporation are not entitled to Section 1244 treatment since they are not the original owner of the stock. In this situation, investors can purchase the corporation’s assets and transfer them to a new corporation that is eligible for Section 1244 treatment.
Please contact us to discuss Section 1244 stock benefits and requirements.
Thursday, September 9, 2010
MRD's required for Pension Plans in 2010
Legislation in 2008 waived the Minimum Required Distributions (MRDs) for 2009 from IRAs and defined contribution plans, including Section 401(k), 403(b), and state-sponsored Section 457 plans. It did not otherwise change MRD rules. Therefore, MRDs are once again required in 2010. The 2009 waiver has no impact on the 2010 MRDs of taxpayers who reached 70½ before 2009. These taxpayers compute their 2010 MRDs as they normally would. For taxpayers subject to the five-year distribution rule, 2009 is not counted as one of the five years. This impacts any account using the five-year rule whose account owner died in 2004 through 2008—basically, the five-year period is extended by one year.
Under the normal MRD rules, taxpayers who reached 70½ in 2009 would have had until April 1, 2010, to take their first MRD. But, since that distribution pertained to 2009, it was waived. However, the waiver did not change the individual’s required beginning date. Therefore, the 2010 MRD for a taxpayer who reached 70½ in 2009 must be made no later than December 31, 2010.
Example: MRDs for a taxpayer who reached 70½ in 2009.
Lori reached 70½ in 2009. Her first MRD (for 2009) normally would have been required no later than April 1, 2010. However, since 2009 MRDs were waived, Lori did not take the 2009 distribution. She must take a 2010 MRD by December 31, 2010.
As a reminder, failure to take required distributions will subject you to a 50% penalty. So, it is very important to compute the correct distribution amount and take the 2010 distribution in a timely manner.
Observation: There is no requirement that a taxpayer who mistakenly fails to receive an MRD in one year make a catch-up distribution in the following year. Instead, the amount that must be distributed in the following year is determined without regard to the fact that the taxpayer failed to receive the MRD in the previous tax year.
Beneficiary Designations: This is a good time to review your beneficiary designation forms and IRA documents. At your death, your beneficiary designations and the terms of your IRA will control not only who will receive those assets, but also the availability of various postmortem planning opportunities for your heirs. Given the right set of circumstances, it may be possible for your IRA assets to continue to grow in their tax-advantaged environment for many years.
Please contact us to discuss retirement plan distribution requirements or any other personal or business tax planning or compliance issues.
Under the normal MRD rules, taxpayers who reached 70½ in 2009 would have had until April 1, 2010, to take their first MRD. But, since that distribution pertained to 2009, it was waived. However, the waiver did not change the individual’s required beginning date. Therefore, the 2010 MRD for a taxpayer who reached 70½ in 2009 must be made no later than December 31, 2010.
Example: MRDs for a taxpayer who reached 70½ in 2009.
Lori reached 70½ in 2009. Her first MRD (for 2009) normally would have been required no later than April 1, 2010. However, since 2009 MRDs were waived, Lori did not take the 2009 distribution. She must take a 2010 MRD by December 31, 2010.
As a reminder, failure to take required distributions will subject you to a 50% penalty. So, it is very important to compute the correct distribution amount and take the 2010 distribution in a timely manner.
Observation: There is no requirement that a taxpayer who mistakenly fails to receive an MRD in one year make a catch-up distribution in the following year. Instead, the amount that must be distributed in the following year is determined without regard to the fact that the taxpayer failed to receive the MRD in the previous tax year.
Beneficiary Designations: This is a good time to review your beneficiary designation forms and IRA documents. At your death, your beneficiary designations and the terms of your IRA will control not only who will receive those assets, but also the availability of various postmortem planning opportunities for your heirs. Given the right set of circumstances, it may be possible for your IRA assets to continue to grow in their tax-advantaged environment for many years.
Please contact us to discuss retirement plan distribution requirements or any other personal or business tax planning or compliance issues.
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