RMDs have always had to be taken before any Roth IRA conversion. The Final Regulations clarify that all an individual’s entire (or aggregate) RMD for the calendar year must be fully withdrawn from their traditional IRA(s) prior to making any Roth IRA conversion, not just the RMD that is associated with the traditional IRA that is to be converted to a Roth IRA. Sequencing matters.

Now may be a good time to engage in a Roth IRA conversion when stock prices are down. For those who are thinking about a conversion, they might want to accelerate that decision while values are low. Balanced against an accelerated decision to convert a traditional IRA to a Roth IRA is the risk that market values will go even lower, and a Roth conversion now is permanent, and it can no longer be recharacterized using ‘hindsight.’

If an individual elected to take substantially equal periodic payments (SEPPs) to avoid the 10% early distribution penalty, he/she may want to consider making a one-time switch to a different method to calculate their annual SEPP distribution with the recent market turmoil.

A trustee can exercise a power to adjust and treat trust principal as trust income in certain situations under Michigan’s version of the Uniform Fiduciary Principal and Income Act. It may soon be possible, if a pending bill is passed, for a trustee also have the power to convert a ‘pay income’ trust distribution standard to a unitrust distribution standard, thus simplifying the trust’s administration.

When the market is a rollercoaster ride, its time to consider the net unrealized appreciation (NUA) tax strategy.

With the expected reduction in governmental programs during President Trump’s administration, more pressure will be placed on publicly supported charities to make up the difference in providing needed services for marginalized members of society. Any small step that Congress can take to encourage philanthropy would be welcome to help address the coming austerity.

The separate account rules were recently modified by the SECURE Act’s Final Regulations, to make it easier for subtrusts to share in a decedent’s retirement account that is payable to the account owner’s Trust. However, additional language will have to be included in the Trust instrument to effectively divide the retirement account payable to the Trust and have each subtrust satisfy the separate account rules.

The proposed budget authority for 2025 allocates $1.011.64 billion to net interest paid on the federal deficit. For comparison purposes, the amount allocated to Medicare is $952.24 billion, or for National Defense, $933.48 billion. If high inflation reappears, or sovereign nations start selling their U.S. Treasury bonds, we can expect the amount of interest paid on the federal deficit to increase even more.

The civil penalty for failing to file beneficial owner information with FinCEN is $591 per day. If there is a willful violation of the beneficial ownership information reporting obligation, that individual may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. With these threats hanging over the heads of a reporting company and a beneficial owner, one would think that FinCEN would be much more helpful in clarifying its definition of a beneficial owner.

The rules that pertain to an HRA are different from a health savings account (HSA), which permit the payment of the HSA account balance after the account owner’s death, but the account balance must be paid within one year of the HSA-owner’s death, and that distribution will be taxable as ordinary income, except that a HSA can be inherited and continue to be used by the HSA- owner’s surviving spouse.