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IRA Rules

IRA Update: March 2013

With the American Taxpayer Relief Act of 2012 that was passed in 2013, there are some new tax considerations to be aware of.

NUA planning with ATRA

NUA or Net Unrealized Appreciation has to do with employer stock within a 401k plan. NUA allows the plan participant to take the employer stock out of the plan in-kind and transfer to a taxable brokerage account while only realizing ordinary income on the original cost of the shares. The gains, or NUA is taxed at long-term capital gains (LTCG) rates but only when the shares are actually sold. See more details on NUA.

Previous to 2013, the difference between the top rate of 35% and the LTCG rate of 15% meant a 20% potential tax savings when using the NUA strategy. With the new top rate of 39.6% and 20% top capital gains rate; difference is 19.6% which is close however one must consider the 3.8% surtax on net investment income. The surtax would be applied on the income generated from the sale of shares after the distribution and thus the tax would be 23.8% which is 8.8% higher than in 2012. In other words the potential tax savings is reduced to 15.8% from 19.6%.

As an aside, almost no one will actually pay 20% capital gains because if your income is high enough to be in the 20% capital gain territory, you are probably also subject to the 3.8% surtax which is why you would pay 23.8%.

It is important to look at the potential tax savings but also important to consider that any future growth of distributed stock would no longer have the protective shell of tax deferral. Once the stock is sold, the capital gain would be realized. Any future income derived from the stock such as dividends would be taxable in the year received. Also the stretch IRA for beneficiaries would no longer be applicable to distributed NUA stock.

A key consideration: Is there significant appreciation on NUA stock and when will you need the NUA funds? If the gain on NUA is not significant, the benefit is less because it may cost a lot in having realized the ordinary income to get the NUA out at ordinary rates if there is a relatively small amount of NUA that would get the LTCG treatment. However if you are going to use the funds soon after distribution, the benefit is high because some of the money that would have been taxed at ordinary rates gets the long-term capital gains treatment instead. If holding for a long time before selling the shares, you have to evaluate whether it makes sense or not.

Roth Conversion Strategies

Roth conversion strategies need to be review and revised in light of the new tax rates. Taxpayers who are subject to the return of the 39.6% bracket obviously pay more tax and need to consider whether they want to convert at this rate. Since the Bush tax cuts for most taxpayers were made "permanent," those who converted into higher tax brackets in 2012 may want to revisit and determine if they should recharacterize and begin to reconvert over a longer period to keep their marginal tax rate lower.

Even with higher rates for high income, taxable assets are still subject to the 3.8% surtax and thus Roth conversion will help to reduce taxation on those types of funds if you were to use those funds to pay the tax on conversions. There certainly is no guarantee that congress won't come back and raise tax rates even more which is already being discussed and this should be factored into your decision to what income tax bracket you will convert to.


Planning with new estate tax threshold

With the estate tax being set at $5 million with portability and inflation adjustments means only the wealthiest will pay estate taxes, that is unless and until this level is brought back down. The Generation Skipping Tax (GST) exemption is set at $5.25 million instead of going back to $1 million. The estate tax rate went up to 40% from 35% but this is only on the amounts about the exemption.

Wealthy IRA owners may want to consider naming grandchildren as beneficiaries of IRAs to take advantage of the $5.25 million GST exemption and the stretch for the younger generation. Trusts may be necessary for grandchildren so watch the wording and the type of trust used so as to not affect the stretch and force small amounts of income to trust and estate tax rates which hit the highest bracket very quickly.

If the estate is potentially large enough, strategies to reduce the estate size such as gifting, Roth conversions, and life insurance via ILITs (Irrevocable Life Insurance Trust) should be considered. You must also consider even though there is a large federal exemption amount, some states still have their own estate tax with different thresholds such as NJ which sits at a $675,000 exemption amount.

Gifts can be given to family members who may be in lower tax brackets to help them convert their own IRAs to Roth IRAs. This can also mean gifts to parents who are in lower tax brackets. Helping a parent or even a grandparent convert their IRA to Roth means that Required Minimum Distributions cease and when you inherit, you can get a tax free stretch, or if you don't need it, have the younger generation named as beneficiaries so that they get lifetime tax free distributions.

Misc Tax Planning

  • Itemized deductions begin to phase-out at $300,000 for Married filing joint ($250,000 for single filers) up to $422,500 ($372,500 for single filers).
  • AMT exemption amount has been permanently indexed to inflation. For 2013 the amount is $80,800 ($51,900 for single filers).
  • Qualified Charitable Distributions temporarily extended for 2013.
  • In-plan Roth conversion rules have expanded.
  • Top trust tax rates starts at $11,950 which means that distributions from inherited IRAs to discretionary trusts that can retain those distributions hit the 39.6% tax rate very quickly.
  • Salary deferrals for 401k, 403b, etc, can reduce the MAGI for the 3.8% surtax however cannot reduce income for purposes of the 0.9% Medicare surtax.


As always, please consult with a qualified tax professional and financial advisor to determine if these strategies are right for you.
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American Taxpayer Relief Act of 2013

Summary of key (IRA) points:

Three new income thresholds that high income taxpayers need to plan for and four different ways income is calculated to compare against the new thresholds.

  • New (return of old) 39.6% tax bracket for joint filers with taxable income over $450,000 ($400,000 for single filers) and a top long-term capital gains and dividend tax rate of 20% which actually becomes 23.8% because such a taxpayer would be subject to the 3.8% surtax on net investment income.
  • Phase-out of itemized deductions up to 80% and personal exemptions for taxpayers whose AGI (Adjusted Gross Income) exceeds $300,000 ($250,000 for single filers)
  • 3.8% surtax on net investment income for those whose MAGI (Modified Adjusted Gross Income) exceeds $250,000 ($200,000 for single filers). At the same levels, earned income in excess of these thresholds will incur an additional 0.9% surtax.

Qualified Charitable Distributions return for 2012 and 2013

New in-plan Roth 401k conversion rules

  • Since 2010 a 401k participant who had a Roth 401k available could do an in-plan Roth 401k conversion IF they were eligible to take a distribution which typically means reaching the age of 59 ½. The ARTA modified this rule to allow participants that are not eligible to take a distribution to do an in-plan Roth conversion.
  • Ability to do an in-plan Roth conversion requires that the plan offers a Roth 401k and while plans are beginning to adopt the Roth 401k in greater numbers, they are not commonplace just yet.
  • If the plan offers a Roth 401k, in order to convert, the plan must also allow for in-plan conversion and there is no requirement that a plan offer this feature.
  • If the option is available, a plan participant must still analyze their tax status to determine if it makes sense to do the conversion, determine whether a Roth IRA conversion is better, wait, or not do it at all.
  • It is critical to keep in mind one of the MAJOR differences between a Roth IRA conversion and a Roth 401k conversion is the ability to recharacterize. When you convert an IRA to Roth, you have until October 15th of the following year to change your mind and reverse the transaction however in a Roth 401k conversion, there is no mechanism for recharacterization so once you execute the transaction, there is no turning back.

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Important IRA Rulings for 2012

In Charles Grant Beech et ux. v. Commissioner, T.C. Summ. Op. 2012-74; No. 1948-11S, 7/26/12, a non-spouse beneficiary, the decedents daughter botched an inherited IRA by not doing a trustee-to-trustee transfer and the whole inherited IRA was taxable all in one year. Remember, a non-spouse beneficiary CANNOT do a (60 day) Rollover; funds must only be moved via direct (trustee-to-trustee) transfer.

In Herring v. Campbell, Administrator of Marathon Oil Company Thrift Plan, U. S. Court of Appeals for the Fifth Circuit, 8/7/12, a $300,000 pension was not inherited by the intended beneficiaries. The decedent, John Hunter named his spouse, Joyce and the primary beneficiary of his pension plan but did not name any contingent beneficiaries. Joyce predeceased John and he never updated his beneficiary form. The plan administrator followed the rules of the plan and eventually the funds were distributed to Mr. Hunter's living siblings, not his "beloved stepsons" who inherited his estate through the Will. Unfortunately for the stepsons, a Will does not cover retirement plans, the beneficiary form does.

In Seeling, U.S. Bankruptcy Court, District of Massachusetts, Western Division, Case No. 11-30957, 5/24/12, the taxpayer received a favorable ruling protecting her inherited IRA from bankruptcy. In Clark, 2012, DC WI, 109 AFTR 2d 2012-733, 1/5/12, another bankruptcy involving an inherited IRA, the bankruptcy court ruled in favor of the creditors initially however a district court later overturned the ruling in favor of the debtor. More and more of these inherited IRA bankruptcy cases seem to be coming up and it appears a precedence is being set in many states in favor of debtors.

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IRA Tax Planning: Qualified Charitable Distribution (QCD)

A Qualified Charitable Distribution or QCD allows an IRA owner who is over the age of 70 ½ to make a charitable contribution up to $100,000 directly to a qualified charity using IRA funds and have that contribution satisfy their Required Minimum Distribution (RMD) for that year. The distribution must be made directly to the charity. If the IRA owner takes the distribution payable to him/herself, they would realize the income on their own tax return. In this case they would be allowed to take the applicable charitable deduction however in many cases, especially for higher income taxpayers, the charitable deduction may be limited as might other tax deductions due to higher thresholds. With the QCD, the funds are transferred directly to the charity so the IRA owner does not realize the income on their return thus the QCD is much more tax efficient.

There are several key points to understand about QCDs:

  • The limit is up to $100,000 per person. A married couple could affectively give $200,000.
  • Applies to IRAs, Roth IRAs, inactive SEP and SIMPLE IRAs; it does not apply to distributions from any employer plan. If a plan owner wishes to do a QCD, an IRA rollover may help accomplish that objective.
  • Roth IRAs are a poor choice to use for a QCD because they would normally be tax free and have no RMDs.
  • The distribution can (partially) satisfy the IRA owner's Required Minimum Distribution depending upon the amount.
  • The distribution must be made directly to the charity from the IRA. A check made payable to the charity from the IRA is acceptable.
  • The income from the distribution is not included on the taxpayer's return thus their AGI is less than what it would be if the distribution were included.
  • A lower AGI (adjusted gross income) means that more tax deductions and credits may be available (lower thresholds due to lower income) to meet.
  • A lower AGI may help avoid the 0.9% Medicare tax and the 3.8% surtax on net investment income.
  • No charitable deduction is allowed if the QCD is used because the distribution is not counted as income.
  • QCDs are made only from pre-tax IRA funds, not basis. If the IRA owner has after-tax basis in their IRA, the pre-tax funds are deemed to come out first leaving behind basis. This is an exception to the pro-rata (Cream-in-the-coffee) distribution rules for IRAs.
  • The charity must be a public charity; grant making foundations, donor advised funds, or charitable gift annuities to not qualify nor do split interest gifts.
  • When a QCD is made, the IRA custodian will still generate a 1099-R; the taxpayer must take appropriate steps on the tax return to avoid the inclusion of income.
  • IRA owner's may not receive anything in exchange for their donation.

QCDs have been extended retroactively to 2012 as part of the American Taxpayer Relief Act of 2013. QCD's have expired and been reinstated for several years now and most likely will continue to be a viable tax planning strategy for those who are subject to Required Minimum Distributions and are charitably inclined. With the top marginal rate now "permanently" set at 39.6% plus the 3.8% surtax on net investment income, a QCD strategy should be considered for especially for those in high tax brackets.

Check out this great article on Qualified Charitable Deductions by Robert Powell in which I was quoted:

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Inherited IRA Horror Story

In anticipation of Halloween, I thought this real client horror story from Ed Slott & Co is timely.

The beneficiary of an IRA, Casey was 17 when she inherited the IRA worth approximately $170,000 at the time. The advisor made the (unfortunately all too common) error of moving the funds into an IRA in Casey's name rather than a properly titled inherited IRA. Casey had no idea if taxes were paid or were supposed to be paid; she relied on the guidance of the advisor.

Over the last 14 years, the account was moved several times to different IRA custodians and no one ever asked how a young person had such a large IRA. Casey only took out about $20,000 in the first three years she had the account and nothing since. Fast forward to the present when she needs some money so she makes a request to the advisor for a distribution. This prompted the current advisor to ask how she had an IRA that large at such a young age which uncovered the truth; it was an inherited IRA gone wrong!

Since a non-spouse cannot do a rollover, the transfer of funds from the inherited account to her own IRA was a taxable event the value of which should have been included on her income tax return for that year. Since it has been more than 3 years, the statue of limitations for audit has passed. However in a case such as this, the funds that went into Casey's IRA was an excess contribution subject to the 6% excise penalty per year until fixed. Normally this penalty would be filed on form 5329 which is considered a separate return, and since not filed, the statue of limitations never started.

The penalty is approximately $10,200 (6% of $170,000) per year for 14 years for a total of $142,800! The excess contribution amount would actually be reduced by the net eligible IRA contribution amount for each year which would make the penalty approximately $124,620 assuming full eligibility for the maximum allowable IRA contributions going back to 1998 and assuming she never made any of her own IRA contributions during those years.

Any distribution from the IRA Casey takes will be taxable. If she takes out the excess amount of $124,620 to pay the penalty, the tax due assuming a 25% tax bracket would be $31,155 plus the 10% early distribution penalty of $12,462 for a total of $43,617. Add these up and we have a total amount due of $168,237. All is not lost however because earning on the excess contributions are not distributed and if we assume a reasonable growth rate of 5% (which is below the 6% penalty amount), then her IRA would be worth approximately $336,588 minus the $168,237 penalty leaves her with $168,351 in her IRA. There would be the other penalties such as failure to file form 5329, accuracy related penalties, and interest due on those penalties for 14 years which would further reduce her IRA.

Note that had a distribution occurred when inherited, she would have paid the tax then presumably at lower rates because she was 17 and single, avoided the 6% annual penalty, and the 10% early distribution penalty which does not apply to beneficiaries of IRAs. More importantly if the original advisor was competent and set up a properly titled inherited IRA for Casey, she could have done the stretch and would still have the IRA today and paid much less tax along the way.

Don't let this happen to you or anyone you love. If you are not already, work with an Ed Slott Trained Master Elite IRA Advisor to make sure you and your beneficiaries don't have a scary story like Casey's to tell!

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More 60-Day IRA Rollover Rulings

When you take funds from an IRA (or other retirement plan) payable directly to you, you have 60 days to get the entire amount into an IRA (or other plan) to avoid the distribution being taxable as income. There are many reasons why some IRA owner's are unable to complete the rollover in the 60 day period. IRS has the authority to grant waivers and give the IRA owner's additional time to complete the rollover however the IRA owner must have a valid reason. In many cases, IRS denies these requests. The following are new PLR requests that have come out:

  • PLR 201146024: Denied- IRA owner used funds for an assisted living facility. The IRA owner's daughter who had power of attorney for her mother took the IRA distribution to get her into the assisted living facility and intended to put the money back within 60 days when her mother's home was sold. Unfortunately the sale of the home took longer than expected and she was not able to get the funds back to the IRA with 60 days. IRS denied the request because she used the funds.
  • PLR 201206023: Denied- IRA owner thought he had 90 days to complete the rollover. In many PLRs, the IRS has granted extensions of the 60 day period to allow a taxpayer the additional time to complete a rollover when in the case of advisor/bank/broker/institution error. In this case, the IRA owner claimed that the employee of the bank told him he had 90 days however he did not have any documentation to prove this claim and presumably the bank/bank employee was unwilling to admit error (assuming the IRA owner was telling the truth and received bad advice) and thus IRS denied his request. 
These PLR requests are expensive and in many cases unnecessary. PLR requests for 60 day rollovers begin at $500 and go up to $3,000 just for the request, not including the professional fee to properly draft the request. First many of the mistakes can be avoided, and when some of these mistakes occur, often the rules are clear and relief is unlikely to be granted. If you plan to do a 60 day rollover, make sure that you get the funds back into the IRA within the 60 days and avoid using the money for anything while out of the IRA. Better strategy to work with an advisor who knows the rules and can help you avoid these mistakes in the first place.
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Age 55 10% Early Withdrawal Penalty Exception

If you take funds from an IRA or other retirement plans before you are age 59 ½, not only do you have to pay the taxes on the distribution, you will also be subject to a 10% early distribution penalty on the distributed amount. One of the many exceptions to the 10% early withdrawal penalty is separation from service from an employer plan in the year the employee turns age 55 or later. This rule is not as clear as some people may think. The key is that the employee must separate from service in the year they turn age 55 or later, not when the distribution is made. Gail Marie Watson found this out the hard way in her fight with the IRS which she unquestionably lost.

In this case, the taxpayer took the distribution after attaining the age of 55 however she had separated from service at only age 53 and thus did not qualify for the exception. The court ruled that the "law is clear;" it is the date of separation from service that is the determining factor, not the age of the distribution.

3 Common Age 55 Exception Mistakes:

1. Separating from service prior to age 55

As the Watson case shows, separation must occur in the year the taxpayer turns age 55 or later. This rules seems to indicate that the person must actually be 55 to be eligible for the exception however this is not the case. The devil is in the details; the separation must occur in the year the person turns 55. This means that separation can occur when the individual is only age 54 as long as they will reach age 55 in that calendar year. This also means that the distribution itself can occur before reaching age 55 as long as the individual turns age 55 that year. For example, if you separate from service on 3/1/2012 when you are age 54, took a distribution from the plan on 6/1/2012, and then turned age 55 on 12/1/2012, you would qualify for the exception. 

2. Taking funds from a different retirement account

The age 55 exception only applies to a plan where the individual has separated from service from the plan. Distributions from IRAs (including SEP & SIMPLE IRAs) never qualify for this exception and distributions from other employer plans will only qualify if the individual separated from service from that plan in the year they turned age 55 or later.

3. Rolling over plan funds to an IRA

The age 55 exception only applies to employer plans where eligible, not IRAs as indicated in item #2 above. If you qualify for this exception and then rollover your balance to an IRA, the exception is lost and there is no way to fix this. So if you separate from service from your employer in the year you turn age 55 but before you are age 59 ½, you might consider waiting to rollover the funds until you are age 59 ½ just in case you need some of the money.

Remember that the exceptions to the penalty only avoid the 10% penalty; taxes on the distributions are still due. Also in order to qualify from penalty free distributions on retirement accounts without any exceptions, you must actually beage 59 ½ when the distribution occurs. Unlike the age 55 penalty exception where you need only reach age 55 in the year of the distribution, you must actually turn age 59 ½ before you take the distribution to avoid the 10% early distribution penalty.
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Trust Deadline for Inherited IRAs

October 31st is the deadline for trust beneficiaries of IRA owner's who died in 2011.

A trust is not a living breathing person and thus does not have a life expectancy therefore when a trust is named as a beneficiary of an IRA, the "stretch" or life expectancy payouts can be lost (or dramatically reduced) and taxes can be higher unless you plan properly. In order for the beneficiaries of the trust to get the Stretch, the trust must qualify as a "see-through" or "look-through" trust by meeting the following four provisions:

  1. The trust must be valid under State law, or would be except for that there is no corpus;
  2. Beneficiaries must be identifiable;
  3. The trust must be irrevocable at death, and;
  4. A copy of the trust (or at least a list of all trust beneficiaries, primary, contingent, and remainder) must be delivered to the custodian by October 31st of the year following the year of the IRA owner's death.

If a trust is named as a beneficiary, and qualifies as a see-through trust, the life expectancy period is still limited to the oldest trust beneficiary. Even if a trust splits off into sub trusts, the age of the oldest trust beneficiary must still be used unless each sub-trust was named as a beneficiary individually. In such a case with proper use of sub-trusts, each sub-trust beneficiary can use their own life expectancy in determining the payout period.

In it also important to understand whether the trust is a "discretionary" or "conduit" trust in determining who's age is used in determining the life expectancy factor. A conduit trust simply receives the payout from the IRA and then passes it on to the ultimate beneficiary; the funds do not stay in the trust. A discretionary trust on the other hand allows the trustee to limit distributions which means that funds can accumulate in the trust. In the case of a discretionary trust, all POTENTIAL trust beneficiaries must be considered in determining whose age is used for the life expectancy payout. For example, suppose three children are named as primary trust beneficiaries, and the contingent is the IRA owner's parent, the beneficiary's grandparent. If it is a discretionary trust, there is a possibility that the grandparent may receive some of the funds and thus must be considered a potential beneficiary which causes the young grandchildren to be stuck with the grandparent's life expectancy which, is much shorter than theirs, in determining the Stretch period.

Naming a trust as a beneficiary comes with many potential pitfalls and rules to follow. Be sure you have consulted with a properly trained IRA expert before naming a trust as a beneficiary.

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Deadline to Recharacterize 2011 Roth Conversions

October 15th, 2012 is the deadline to recharacterize Roth IRA conversions that were done in 2011.

Roth conversions are great because you have until this October 15th of the year following the year of the conversion to change your mind for whatever reason. Perhaps the account went down in value or you don't have the money to pay the tax, no problem, you get a do-over.

If the value of the Roth IRA has declined after a conversion it might pay to recharacterize. Let's look at an example. Suppose you converted $100,000 on 1/1/2011 and you are in the 25% tax bracket. The tax due for the conversion would be $25,000. Now suppose the account dropped to $50,000; the tax of $25,000 relative to the current account value is now 50%, not 25%. Recharacterizing would allow you to move the $50,000 back to the IRA and you get your tax money back. And once you wait the prescribed period (the later of the following tax year or 30 days) you can re-convert the same funds. In my example, now you only have $50,000 to convert and at 25% the tax is only $12,500. So you still have only $50,000 in the Roth IRA however the cost to get it there was $12,500 less! A great deal. Roth conversions allow you to "bet on the horse after the race is over."

Keep in mind that this is only for 2011 conversions. Some people converted in 2010 and took the 2-year deal which allowed them to spread the inclusion of the income on the conversion, half in 2011 and half in 2012. So for these years you are including income from a conversion that occurred in 2010. If you are wondering if you can recharacterize either of those amounts, the answer was no because the conversion was in 2010 and that deadline was 10/15/2011.

Remember too that the current tax rates are set to expire on 12/31/2012 and unless congress acts to extend the Bush tax cuts, the tax rates are going up and there will be the additional 3.8% surtax on net investment income. So if you recharacterize and plan to reconvert in 2013, be aware of the possibility of higher taxes and depending upon the situation, you may be better off not recharacterizing.

See September's IRA Update for more details regarding Roth Conversions and Recharacterizations.

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60-Day IRA Rollovers

A 60 day rollover occurs when funds are distributed from a retirement account directly to the owner who then has 60 days to "rollover" the funds to an IRA to avoid paying tax. If the funds do not make it to the proper account, the whole amount is taxable. There are many pitfalls to the 60 day rollover and mistakes happen frequently however there is possible relief by requesting a Private Letter Rulings (PLR) from the IRS. It is best to avoid the mistake because fees for rollover PLRs start at $500 for a rollover less than $50,000 and $3,000 for rollovers over $100,000 not including the professional fee to properly draft the PLR request which can thousands of dollars.

The best way to avoid the 60 day rules is to do a trustee-to-trustee transfer (from one IRA custodian directly to the other) where you do not take what is known as "constructive receipt." If a check is sent to you, as long as the check is made payable to the IRA (i.e.- TD Ameritrade FBO: John Doe), then it is considered a trustee-to-trustee transfer not subject to the 60 day rollover rules because you cannot cash a check that is not made out to you directly.

In order to qualify for relief of a 60-day violation, you must be able to show that you had a true intent to do a rollover. If the funds were used for anything during the 60 day period, chances are your PLR will be denied. The following are summary examples or PLR Rulings:

  • PLR 201117046: Denied- Taxpayer thought she had 90 days to complete her "search" for a new custodian. Ignorance of the rules is not a defense.
  • PLR 201118025: Denied- Taxpayer used funds as a short-term loan to help finance handicapped mother's residence.
  • PLR 201123048: Denied- IRS denies wife an extension to roll deceased husbands plan distribution to her own IRA. Normally a spouse beneficiary can do a rollover (a non-spouse beneficiary can never do a rollover) however in this case, the funds were distributed from the company plan into a joint account before the husband died not after and thus IRS denied it
  • PLR 201126041: Denied- IRS tells taxpayer the failure to complete a rollover was her own fault, not the advisors. In many PLRs, where the taxpayer was able to prove that the advice they were given by the advisor, bank, or brokerage was inaccurate causing them to miss the 60 day deadline, the PLR is granted and they then have 60 days to fix the mistake. In this case, the IRA owner moved her IRA because she was unhappy about the high fees in the account. The advisor told her to get the funds into another IRA within 5 days. Even though the advice of 5 days was incorrect, the IRS denied the ruling stating that had she followed the incorrect advice, there would be no 60 day violation.
  • PLR 201122032: Granted- IRS grants relief after taxpayer's get bad advice.
  • PLR 201130014: Denied- IRA owner withdrew from an IRA due to financial hardship. This was denied because there was no intent to do a rollover; the funds were used during the 60 day period.

The IRS is denying more and of these PLR requests than they have in the past so the best plan is the trustee-to-trustee transfer whenever possible.

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