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 […]

Take-Away: Transfers to irrevocable trusts are completed gifts. Some settlors have second-thoughts on the gifts that they made, and they turn to ‘creative’ attempts to unwind their prior gifts. Background: On several occasions we have covered the basic principles behind a completed gift for Michigan property law . Other missives will soon identify factors when […]

Take-Away: A bill has been filed in Congress to allow a penalty-free rollover of unused IRC 529 plan balances into a Roth IRA. Background: The bill, called the College Savings Recovery Act, would allow for special rollovers to Roth IRAs from long-term qualified tuition programs without any penalty. The bill has bipartisan sponsors [ Richard […]

Take-Away: There may still be time for individuals who took a coronavirus related distribution (CRDs) to repay the withdrawn funds to their retirement account. But time may be running out on this opportunity. Background: Congress you will recall  in 2020 passed the CARES Act. The CARES Act permitted qualified individuals who were affected by COVID […]

Take-Away: Planning for an individual’s disability, while preserving the eligibility for governmental benefits should include opening an ABLE account for the disabled individual. Background: In 2014 Congress adopted the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (the ABLE Act.) This Act added IRC 529A to the Tax Code. The Act provides […]