IRA Planning Archive

A Prohibited Transaction Blows Up Another IRA

Another IRA prohibited transaction by a taxpayer blows up yet another IRA from LISI James and Judith Thiessen wanted to obtain the assets of a metal fabrication business. To enable that acquisition, they rolled over their tax-deferred retirement funds into newly formed Individual Retirement Accounts. Those IRAs then acquired the initial stock of a newly formed …

Prohibited Transaction Blows Up IRA Bankruptcy Protection

Prohibited Transaction the Culprit: Court Rules IRA not Protected In a relatively recent court case, Kellerman v. Rice (9/14/2015) the US District Court (E. Arkansas) ruled that the couple seeking bankruptcy would not be able to protect their IRA due to an improper real estate deal. Therefore the IRA assets, which would have been normally protected from …

IRS Rules Partial IRA Transfer Blows Up a 72t Plan

A partial IRA transfer  currently using Rule 72(t) led to another predictable result for an IRA who was ignorant of IRA rules. In another one of those “gotcha it’s too late” situations with the IRS, the service in PLR 201323045 has ruled again (and has ruled in the past) against an IRA owner that had a …

Why IRA Contribution Indexing Is a Boon to the Self Employed

images courtesy of Tax Credits via Flickr Millions of small businesses in the US are owned by people who need to invest for their future but who don’t have a generous 401(k) plan in place. When looking to save for the future, many options present themselves offering different benefits and costs. For many though, especially …

Should You Take A Pension Roll-out Lump Sum Option?

A pension roll-out lump sum should only be taken after the most deliberate study of the figures. I’ve been getting a few inquiries lately about whether or not clients should take the lump sum pension roll-out benefit option from their employer pension. Before I get into analyzing that decision, let’s review how the offer comes …

6 Inherited IRA Mistakes to Avoid

Note on Inherited IRA Mistakes: IRA issues can affect multiple generations! Inheriting an IRA is not like inheriting a car. With an object like a car, the car is signed over to you and it’s yours to do as you please. You can sell it, use it, or gift it. An Inherited IRA, on the …

Pension Buy-Outs Put Retirement Incomes at Risk

On the back of a recent pick up in performance in auto sales, auto makers are smartly looking to buy out workers’ pensions. Why is this smart? Let’s recap. Pension obligations have grown far larger than most companies could afford with their cash flow. These companies, therefore, have relied upon market performance to make up …

72T Questions Increasing As More People Choose to “Retire” Early

If you’re like many people, you’re getting sick of working at your job. And instead of continuing to look for a job similar to your last one, you are considering using a combination of: early pensions, early retirement withdrawals, part time jobs and consulting gigs, and low cost living to check out of the corporate rat race early. Why Are …

Don’t Make This Costly IRA Beneficiary Mistake

A beneficiary mistake on an IRA can cost you thousands… You’ve done your estate planning. You’ve put assets into a trust, that distributes to your heirs upon you and your spouse’s death. You and your spouse are the trustees and instructions are clear for the backup trustee. Most of your assets will avoid probate. You …