While some in Congress currently wring their hands that somehow donor advised funds provide a big tax loophole for donors, or in some manner donor advised funds are abused by donors, these statistics demonstrate the donor advised funds have been broadly embraced by Americans as one more way to support thousands of charitable organizations across the country.

An IRA custodial agreement and beneficiary designation will be interpreted according to the laws of the state where the IRA custodian is located, not the state of the IRA owner’s residence.

Qualifying a trust as a see-through trust just got a bit easier with the SECURE Act’s Final Regulations.

A married couple who runs a successful business with no other employees can contribute a substantial amount of deductible contributions, each year, to a solo 401(k) plan. And a small self-employed business owner with no employees should consider adopting a solo 401(k) plan before April 15, 2025.

Trust modifications and early terminations carry with them the risk of indirect gifts by one or more of the trust beneficiaries. That seems to be a recurring theme in the Tax Court these days.

An employer’s matching contribution for a plan participant’s repayment of his/her student loans is an interesting feature for qualified plan sponsors to consider if they want to help those plan participants to continue to save for their retirement while at the same time, they dig themselves out of their burdensome student-debt. However, the fact that the QSLP is an optional feature that must be accepted by the plan sponsor, along with additional certification responsibilities assumed by the plan administrator, makes me wonder just how many employers will actually amend their 401(k) plans to add this feature.

Most individuals are fully aware of the April 15 tax filing date. Many individuals are also aware that it is fairly easy to obtain from the IRS an extension in which to file their Form 1040 income tax return for the prior year. They then make the mistake of assuming that if they made an excess contribution to their 401(k) account for the prior year, they have until October 15 of the following year to fix that problem. Having filed an extension to file a Form 1040 for 2024 will not give a plan participant more time to receive a corrective distribution to fix the problem.

The Tax Code will in some situations regarding the funding a trust automatically allocate to the trust the transferor’s generation skipping (GST) tax exemption, classifying it a GST Trust. That deemed allocation is intended to protect the transferor from inadvertently failing to use his/her GST exemption when it is likely that skip-persons, e.g., a grandchild, will receive an interest in the transferred asset. However, there are occasions when the transferor may not want to use his/her GST exemption on transfers made to an irrevocable trust. What is, and what is not, a GST Trust requires a complicated analysis.

The big mistake is in assuming that all inherited retirement accounts can be rolled over to the beneficiary and then to the inherited ‘beneficiary’ IRA. There is no 60-day rollover option. Only surviving spouses can engage in a roll over to the survivor’s own retirement account. Using the wrong method to move an inherited retirement account will result in unintended distributions and cause the beneficiary to lose opportunities to obtain tax-deferred growth in the inherited retirement account.

With the new Final Regulations, with an accumulation see-through trust, only the current trust beneficiary and the secondary beneficiary or beneficiaries (who takes when the current trust beneficiary no longer is living or is ineligible to receive distributions) are counted when implementing the see-through trust rules. This is a positive result since it narrows the group of trust beneficiaries who must be identified for the see-through rules.