Take-Away: We have yet another example of the IRS’s apparent move towards leniency in addressing IRA distribution ‘mistakes’ in a recent private letter ruling (PLR), where the IRS accepted a court order that changed the decedent’s IRA beneficiary from his children to his surviving spouse. Private Letter Ruling: No. 201934006, Dated May 30, 2019, released […]

Take-Away: Several states now permit individuals to use gender-neutral ‘X’ markers on their state driver’s licenses, identification cards, and other official documents. This third gender option is prevalent in the European Union, and it appears to be gaining traction in the U.S. Background: A 2016 study at UCLA found that the percentage of trans adults, […]

Take-Away: An intra-family loan is a simple and understandable way to shift wealth from an individual in a high income tax bracket to an individual in a lower income tax bracket. Structuring that loan,  however, is critical in order to avoid an implied gift under the Tax Code. Background: We know that funding a grantor […]

Take-Away: The Supreme Court’s decision in Kaestner this past June held that a state could not impose an income tax on accumulated income in an irrevocable trust if the sole basis to impose the state’s income tax was the state residence of a trust beneficiary. While that was good news, the Supreme Court made it […]

Take-Away: A recent article noted the dramatic change in the longevity of individuals with reference to their income levels. The import of that study is that current life expectancy tables understate the actual life expectancy of wealthy individuals, which disparity should lead them to plan more aggressively for their longer life expectancies, and before the […]

Take-Away: Some qualified plans permit plan participants to take loans from their retirement account. If the participant fails to repay an installment in a timely manner, the loan will be treated as a taxable distribution of the loan balance and possibly trigger the 10% penalty for an early distribution. Background: Amounts distributed to a plan […]

Take-Away: The Uniform Law Commission approved a year ago the Uniform Fiduciary Income and Principal Act. This Act, if adopted by Michigan, makes some important changes to the 1994 and 1997 versions Uniform Principal and Income Act (UPIA). The earlier UPIA Acts tended to create some dilemmas for a trustee that is charged with prudent […]

Take-Away: A Bill currently before the Michigan Legislature would permit married Michigan residents to declare that assets held by them in a community property trust would be classified as community property for all purposes, and in particular for an income tax basis adjustment on the death of one spouse. If the trust’s assets were classified […]

The House of Representatives passed the SECURE ACT in late May, which would eliminate what is called the stretch IRA. A stretch IRA is a popular planning technique because it allows the beneficiary to take distributions from an inherited IRA or qualified plan account over the beneficiary’s life expectancy. Consequently, the recognition of the taxable […]

Take-Away: For individuals who want to fund a Roth IRA, but whose modified adjusted gross income (MAGI) is too high to permit funding a Roth IRA, the backdoor Roth IRA strategy can be used with an after-tax traditional IRA contribution. Backdoor Roth IRAs were of questionable legality until the 2017 Tax Act, which appears to […]