Take-Away: The SECURE Act Proposed Regulations are effective beginning in 2022. Whether we like these new rules or not, they must be followed, even when the Regulations are not yet final. The Proposed Regulations provide for complex, aka confusing, distribution rules, and also some needed flexibility when it comes to ‘fixing’ see-through trusts. Background: As […]

Take-Away:  Accessing a retirement account funds without a penalty, other than an IRA, is possible at age 55 years, but only if there has been a separation from service. However, this rule is often misunderstood. Background: One of the exceptions to the 10% penalty for early withdrawals from a retirement plan account is the rule […]

Take-Away: There are occasions, albeit infrequent, when a QTIP Trust for a surviving spouse creates difficulties when the spouse-beneficiary dies. There are few options to consider if the decision is made to exit a QTIP Trust, but each carries its own unique tax implications. Background: A QTIP Trust for a spouse defers federal estate taxes […]

Take-Away: The Michigan Court of Appeals recently held that a wife’s dower interest (now repealed) only placed a cloud on the title to her husband’s real estate. The absence of the wife’s release of her dower interest in the deed did not void her husband’s deed. Background: A wife’s dower interest in real estate owned […]

Take-Away: For those interested in establishing a Roth IRA to save income taxes in their future retirement years, they might want to consider a reverse rollover to move after-tax contributions to a Roth IRA with little, or no, income tax consequences. Note: This is a ‘refresher’ summary of an earlier missive on reverse rollovers to […]

Take-Away: As small business owners seek to avoid capital gains when they decide to sell their business, they first need to determine if their stock qualifies as small business stock, as the tax savings can be significant. Background: The Tax Code contains a provision that creates an incredible opportunity to avoid capital gain recognition for […]

Take-Away: In order to save state income taxes, make a qualified charitable distribution from an inherited IRA, if one is available. Background: An inherited traditional IRA, or an inherited Roth IRA, can be the source of a qualified charitable distribution (QCD). The QCD will be reported as a death distribution. And like a QCD from […]

Take-Away: Qualified Charitable Distributions from a traditional IRA is a great way to carry out charitable giving and also potentially avoid higher marginal federal income tax brackets. That said, there are some technical rules that must be complied with in order to exploit this opportunity. Background: A qualified charitable distribution (QCD) is the direct payment […]

Take-Away: The IRS recently extended the time when a ‘late’ Form 706 Federal Estate Tax Return can be filed on which a portability election is made, going from two years after the deceased spouse’s death to five years after the deceased spouse’s death. Background: In Revenue Procedure 2022-32 the IRS changed a 2017 Revenue Procedure, […]

Take-Away: The tax consequences of a divorce settlement agreement are much more difficult than they were prior to 2018. It is much more difficult to negotiate provisions in those agreements to shift the tax burden, or ‘create’ and income tax deduction. Background: As part of the 2017 Tax Act,  Congress ended the tax deduction for alimony […]