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IRA

A guide to drawing down your savings in retirement

A guide to drawing down your savings in retirement

As reported in the LA Times, “A guide to drawing down your savings in retirement.” The approach of retirement should be an exciting time for 50- and 60-somethings. But when the issue is your finances — and whether you’ve saved enough to last the rest of your life — excitement can quickly be overridden by […]

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How to divvy up assets as you head for retirement

How to divvy up assets as you head for retirement

As reported in the LA Times, “How to divvy up assets as you head for retirement.” Choosing how to invest retirement savings often ends up being a dartboard exercise for younger people, because it all seems so theoretical. As the date of retirement or semi-retirement gets nearer, however, you begin to realize that your financial […]

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Long-term care insurance: Less bang, more bucks

Long-term care insurance: Less bang, more bucks

As reported in the OC Register, “Long-term care insurance: Less bang, more bucks.” Mary Julia Klimenko thought she was prudent 20 years ago when she invested in a long-term care insurance policy, one she believed would help pay for the care she’d need as she aged. Now she wishes she’d banked the money instead. Her […]

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Rollover requirement waived for taxpayer who relied on spouse’s financial acumen

Rollover requirement waived for taxpayer who relied on spouse’s financial acumen

PLR 201612017 In a private letter ruling (PLR), IRS has waived the 60-day IRA rollover requirement for a spouse who erroneously relied on her spouse’s financial know-how. However, the other spouse wasn’t as lucky. His untimely IRA rollover got no relief because he couldn’t show that he intended to make a valid rollover. He deposited […]

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Tax Court – IRA owner’s guarantee of loan to IRA-owned corporation resulted in deemed distribution

Tax Court – IRA owner’s guarantee of loan to IRA-owned corporation resulted in deemed distribution

Thiessen, (2016) 146 TC No. 7 The Tax Court has held that a taxpayer’s personal guarantees of loans made to a corporation that he formed and that was owned by his individual retirement account (IRA) were prohibited under Code Sec. 4975 and resulted in a deemed distribution of all of the IRA assets. It also […]

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Court of Federal Claims – taxpayers’ “rollover as business startup” account wasn’t valid retirement plan

Court of Federal Claims – taxpayers’ “rollover as business startup” account wasn’t valid retirement plan

Powell v. U.S., (Ct Fed Cl 3/16/2016) 117 AFTR 2d ¶ 2016-515 The Court of Federal Claims has denied taxpayers’ claim for refund, rejecting their argument that their Individual Retirement Account (IRA) withdrawals were nontaxable distributions that were rolled over into a “Business Owners Retirement Savings Account,” or BORSA — essentially, a variation of a […]

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Tax Court – failure to report court-ordered IRA liquidation results in accuracy-related penalty

Tax Court – failure to report court-ordered IRA liquidation results in accuracy-related penalty

Navaid, TC Memo 2016-37 The Tax Court has ruled that a taxpayer who failed to report the court-ordered liquidation of his bank-held IRA for restitution payments was liable for the accuracy-related penalty for substantial understatements of income tax. Although the taxpayer was never notified of the court’s action and never received a Form 1099-R, the […]

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Tax Court – Taxpayer’s direction to IRA custodian to purchase stock didn’t result in taxable distribution

Tax Court – Taxpayer’s direction to IRA custodian to purchase stock didn’t result in taxable distribution

McGaugh, TC Memo 2016-28 The Tax Court has ruled that there wasn’t a taxable distribution to the owner of a self-directed IRA who directed the IRA custodian to wire cash to purchase shares of a private company, where certificates for those shares were apparently delivered after the 60-day rollover period in Code Sec. 408(d)(3). The […]

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Important date approaching in 2016 for older taxpayers with IRAs and qualified plan accounts

Important date approaching in 2016 for older taxpayers with IRAs and qualified plan accounts

A critical date is approaching for many taxpayers who attained age 70 1/2 in 2015.  By Apr. 1, 2016, these taxpayers must commence making required minimum distributions (RMDs) from their traditional IRAs. (Lifetime distributions need not be taken from Roth IRAs at any age.) (Code Sec. 408A(c)(5)) A participant in a qualified retirement plan (e.g., 401(k) […]

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Tax Court – attempt to use C corp to avoid Roth IRA contribution limits doesn’t work

Tax Court – attempt to use C corp to avoid Roth IRA contribution limits doesn’t work

Polowniak, TC Memo 2016-31 The Tax Court has held that a individual’s attempt to circumvent the Roth IRA contribution limits, by funneling payments through a C corporation in which his Roth IRA held a 98% interest, resulted in a Code Sec. 4973 excise tax on excess contributions. The fee-for-services agreement used, and the payments funneled […]

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Tax Court – Taxpayer had claim of right in payment by SEP-IRA, so it was taxable to him

Tax Court – Taxpayer had claim of right in payment by SEP-IRA, so it was taxable to him

Vandenbosch, TC Memo 2016-29TC Memo 2016-29 The Tax Court has held that a multi-step transaction, that was intended to result in taxpayer’s SEP-IRA making a loan to a third party, instead resulted in the taxpayer having a claim of right in the money paid out of the SEP-IRA. Thus, that money ended up being taxable […]

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Surviving spouse/sole trustee of decedent’s trust granted rollover relief for IRA despite regs

Surviving spouse/sole trustee of decedent’s trust granted rollover relief for IRA despite regs

PLR 201606032 In a Private Letter Ruling (PLR), IRS has ruled that it would waive the 60-day rollover requirement for a taxpayer whose failure to timely roll over funds from her husband’s individual retirement arrangement (IRA) to her IRA was due to her emotional distress following the death of her husband and the stress of […]

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Well-kept secret for U.S. taxpayers: the Saver’s Credit

Well-kept secret for U.S. taxpayers: the Saver’s Credit

CHICAGO (Reuters) – It sounds too good to be true: some workers can get a double tax benefit by saving for retirement. But the federal Saver’s Credit does just that by providing a second layer of tax incentives for lower-income households beyond the benefit of tax deferral that everyone receives for contributing to a 401(k) […]

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Rollover relief granted to taxpayer who suffered emotional distress following spouse’s death

Rollover relief granted to taxpayer who suffered emotional distress following spouse’s death

PLR 201606032 In a Private Letter Ruling (PLR), IRS has ruled that it would waive the 60-day rollover requirement for a taxpayer whose failure to timely roll over funds from her husband’s individual retirement arrangement (IRA) to her IRA was due to her emotional distress following the death of her husband and the stress of […]

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Proposed Regs would modify nondiscrimination requirements for closed pension plans

Proposed Regs would modify nondiscrimination requirements for closed pension plans

Preamble to Prop Reg1/28/2016; Prop Reg § 1.401(a)(4)-2, Prop Reg § 1.401(a)(4)-3, Prop Reg § 1.401(a)(4)-4, Prop Reg § 1.401(a)(4)-8, Prop Reg § 1.401(a)(4)-9 , Prop Reg § 1.401(a)(4)-12 , Prop Reg § 1.401(a)(4)-13 IRS has issued proposed regs that would modify the nondiscrimination requirements applicable to certain retirement plans that provide additional benefits to […]

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No rollover relief for taxpayer who tried to use IRA distribution to buy partnership interest

No rollover relief for taxpayer who tried to use IRA distribution to buy partnership interest

PLR 201547010 In a private letter ruling, IRS has refused to waive the 60-day rollover requirement for a taxpayer whose attempt to use an IRA distribution to buy an interest in a partnership failed because the IRA custodian couldn’t hold the interest—a mistake that the taxpayer did not learn of for almost a year. Although […]

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Top Year-End IRA Reminders from IRS

Top Year-End IRA Reminders from IRS

Individual Retirement Accounts, or IRAs, are important vehicles for you to save for retirement. If you have an IRA or plan to start one soon, there are a few key year-end rules that you should know. Here are the top year-end IRA reminders from the IRS: Know the contribution and deduction limits.  You can contributeup to […]

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Tax Court – Retirement plan participant couldn’t carry forward disallowed IRA contribution deduction

Tax Court – Retirement plan participant couldn’t carry forward disallowed IRA contribution deduction

Dunn, TC Memo 2015-208 The Tax Court has rejected various arguments made by a taxpayer to carry forward an IRA contribution deduction that was disallowed because, in the year for which the contribution was made, he was an active participant in a retirement plan and had high earnings.   Click here for the Opinion of the […]

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Year-end planning: withdraw required minimum distributions before year-end to avoid penalty

Year-end planning: withdraw required minimum distributions before year-end to avoid penalty

Now that we’re in the final quarter of the year, older taxpayers need to keep a careful eye on their required minimum distributions (RMDs) for the year, as a stiff penalty applies to those who don’t withdraw enough from their retirement accounts. This article explains the rules that apply and offers a withdrawal strategy for […]

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Treasury expands funding options for myRAs

Treasury expands funding options for myRAs

U.S. Treasury Launches myRA (my Retirement Account) to Help Bridge America’s Retirement Savings Gap (Nov. 4, 2015). The U.S. Department of the Treasury (Treasury) has announced that it has expanded the ways that taxpayers can fund myRAs (my Retirement Accounts), which are a type of government-administered Roth IRA initially offered by Treasury in 2014. Background […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney