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Archive for October, 2009
Qualified Charitable Distributions from IRAs still in effect for 2009
by P. Lewis RobinsonOct
30
Charitably Inclined – Qualified charitable distributions (QCDs) are still in effect for 2009. IRA owners age 701⁄2 and older can transfer up to $100,000 of IRA money directly from an IRA to a qualifying charity. Those who are most willing to give to charity are also those who may not need their RMDs for this year.
It will usually pay for them to roll the money back into an IRA and give to the charity from there. The IRA owner does not include the QCD in income, nor does he receive a tax deduction for the donation.
But tax-wise this works out better than if he withdrew the funds from his IRA and donated them to charity. He would receive a tax deduction for the funds donated, but he would also have to include the distribution in income. That would increase his adjusted gross income which in turn could cause deductions, exemptions, tax credits and other tax benefits to be lost. This would increase the overall tax bill. It will pay for him to roll the unwanted RMD back into an IRA and transfer the funds to the char- ity from the IRA.
The higher your income, the more it makes sense to use the QCD approach.
More Info on Pending Extension of Credit for Home Buyers
by P. Lewis RobinsonOct
30
The U.S. Senate is considering extending and expanding the home buyers’ tax credit to help prop up the still-reeling housing market.
Under the proposal, the $8,000 credit for first-time buyers would be extended to cover purchases into next spring – buyers must sign contracts by April 30 and close within 60 days. Currently the credit is due to expire at the end of November. (more…)
Home buyer credits gets new life from WSJ
by P. Lewis RobinsonOct
29
By COREY BOLES and JOHN D. MCKINNON
WASHINGTON — Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain.
The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years.
Can 2009 required minimum distributions (RMDs) that were received and were not required be undone?
by P. Lewis RobinsonOct
27
The 2009 required minimum distributions (RMDs) from plans and IRAs was suspended by the passage of the Worker, Retiree and Employer Recovery Act of 2008 (WRERA).
Even though the RMDs were suspended for 2009, some people received them anyway. In general, when a taxpayer receives a distribution from a qualified retirement account or an IRA, that distribution is eligible for rollover to another retirement account within 60 days of the receipt of the funds.
Can they be undone?
- For those who realized the situation within 60 days, the answer was to simply roll the funds back to an IRA or plan (providing they were eligible) and eliminate the tax bill.
- If the 60 day window has expired, the Internal Revenue Service released Notice 2009-82 which grants many IRA owners and plan participants an extension to roll over certain distributions.
- The extension is available until the later of November 30, 2009 or until 60 days have passed from the receipt of the distribution
- Those who took early distributions, distributions as part of a 72(t) payment plan and normal distributions (after 591⁄2 but before they were required) are unaffected by this Notice.
- The IRS relief provision only applies to IRA owners and plan participants who were subject to RMDs in 2009, and not to non-spouse beneficiaries.
- “However, because of the one-rollover-per-year rule in § 408(d)(3), which was unchanged by WRERA, no more than one distribution from an IRA in 2009 will be eligible for this rollover relief.”
- Only one 60-day rollover per year (12 months) is allowed from each of a taxpayer’s IRAs to another IRA. A rollover occurs when funds are distributed from the IRA, payable to the owner, and then are contributed to another IRA within 60 days.
A must article for estate tax planning
by P. Lewis RobinsonOct
24
I highly recommend this article in the Wall Street JOurnal in regard to the future of estate taxes.
The Gift that keeps on giving: the Roth IRA
by P. Lewis RobinsonOct
24
Please refer to the link below to an excellent article in the Wall Street Journal on Roth IRAs. I particular encourage you to read this article if your parents have IRAs or Roth IRAs.
10/23/09 Quote
by P. Lewis RobinsonOct
23
“Tact is the knack of making a point without making an enemy. ”
Isaac Newton
10/21/09 Quote
by P. Lewis RobinsonOct
21
“Today I bent the truth to be kind, and I have no regret, for I am far surer of what is kind than I am of what is true.”
Robert Brault
