CHAPTER 1
RETIREMENT TAX PLANNING SUMMARY
§ 1.01 Initial Tax Planning for Retirement
-----[1] Initial Considerations for Tax Planning for Retirement
-----[2] Payment Options Under Employer Retirement Plans
----------[a] Payment Options in General
----------[b] Non-tax Considerations Affecting Choice of Payment Option
----------[c] Taxation of an Annuity Payable over One or More Lifetimes
----------[d] Taxation of Required Spousal Annuities
----------[e] Taxation of Distributed Annuity or Life Insurance Contracts
----------[f] Taxation of a Lump Sum Distribution of the Entire Amount of Benefits
----------[g] Taxation of a Lump Sum Distribution of a Portion of Total Benefits
----------[h] Distribution of Employer Securities
----------[i] Payment Elections Under Eligible Exempt Organization Plans
----------[j] Payment Elections Under Unfunded Nonqualified Plans
----------[k] Qualified Retirement Plan Annuity Earned Substantially Outside U.S
----------[l] U.S. Government Benefits Payable to Foreign Persons
-----[3] Transfers from Employer Retirement Plans to IRAs
----------[a] Transfers from Employer Retirement Plans to IRAs Generally
----------[b] Employer Plans Qualifying for Tax-Free Transfers to IRAs
----------[c] Tax-Free Trustee-to-Trustee Transfers from a Plan to an IRA
----------[d] Tax-Free Indirect Rollovers from a Plan to an IRA
----------[e] Retention or Transfer of Investment in the Plan
----------[f] Transfer of Employer Securities
----------[g] Timing of Transfers from a Qualified Plan to an IRA
----------[h] Transfers from Retirement Plans to IRAs by Surviving Spouse
-----[4] IRA Rollovers to Qualified Retirement Plans
-----[5] Avoiding the Penalty on Certain Early Distributions
----------[a] The Penalty Tax and Exceptions
----------[b] Avoiding the Penalty Using Substantially Equal Periodic Payments
----------[c] Avoiding the Penalty by Purchasing a Single-Premium Immediate Annuity
----------[d] IRA Funds Transferred to an Employer Plan to Avoid the Penalty
----------[e] IRA Conversion While Receiving Substantially Equal Periodic Payments
----------[f] Retention or Transfer of Investment in the Plan
----------[g] Young Surviving Spouse
----------[h] Early Retirement of a Police Officer, Firefighter, or Emergency Medical Worker
§ 1.02 Tax Planning During Retirement Years
-----[1] Funds in Tax-Favored Plans Contributed to Roth IRAs or Roth Accounts
----------[a] Taxable Qualified Rollover (TQR) Contributions to Roth IRAs
----------[b] Long-term Tax Savings Due to Tax Rate Differential
----------[c] Long-term Tax Savings Due to Transfer of High Income Assets
----------[d] Transfers to Roth IRAs When Funds Not Needed in Retirement
----------[e] Retention of Funds in Both Regular IRAs and Roth IRAs
----------[f] Potential Collateral Benefits of TQR Contributions
----------[g] Satisfying the Conditions Imposed on TQR Contributions
----------[h] Trustee-to-Trustee TQR Contributions to a Roth IRA
----------[i] Indirect TQR Contribution from a Tax-Favored Plan to a Roth IRA
----------[j] Choice of Qualified Plan or IRA for Making a TQR Contribution
----------[k] IRA Conversion While Receiving Substantially Equal Periodic Payments
----------[l] Reversals of TQR Contributions to Roth IRAs
----------[m] TQR Contributions by Surviving Spouses
----------[n] TQR Contributions to Designated Roth Accounts
-----[2] Nontaxable Rollovers from Designated Roth Accounts
----------[a] Designated Roth Accounts Within Cash or Deferred Arrangements
----------[b] Rollovers from Designated Roth Accounts to Other Roth Accounts
----------[c] Rollovers from Designated Roth Accounts to Roth IRAs
----------[d] Choice of Rollover to another Designated Roth Account or to a Roth IRA
-----[3] Planning for Required Minimum Distributions
----------[a] Required Minimum Distribution Rules Generally
----------[b] Choice of Annuity or Non-Annuity Minimum Distributions
----------[c] Planning Non-Annuity Distributions for the First Minimum Distribution Year
----------[d] Planning Non-Annuity Distributions for Married Individuals
----------[e] IRAs and Plans Making both Annuity and Non-Annuity Minimum Distributions
-----[4] Tax Planning for Spousal Annuities
----------[a] Two Types of Spousal Annuities: QJSAs and QPSAs
----------[b] Tax Deferral for Participants
----------[c] Tax Deferral for Surviving Spouses
----------[d] Dealing with Refusal to Consent
----------[e] Marriage and Divorce Planning
-----[5] Temporary Personal Use of Rolled-Over Funds
-----[6] The Nontaxable Portion of Social Security Benefits
----------[a] Lowering Taxes on Social Security Benefits Generally
----------[b] Lump Sum Payment of Prior Year Social Security Benefits
-----[7] The Nontaxable Portion of U.S. Military Disability Pay
-----[8] Plan Insurance Premium Payments for Retired Police, Firefighters, etc.
-----[9] Deductions for Long-Term Care Services
----[10] Long-Term Care Insurance
----[11] Fees Paid to Continuing Care Retirement Communities
----[12] IRA Distributions Paid Directly to Charities
----[13] Payments for Long-Term Disability
----------[a] Sourced Disability Payments
---------------[i] Taxable in Proportion to Employer Contributions
---------------[ii] Conversions to Retirement Benefits
---------------[iii] Corrections of Employer Errors or Methodology
----------[b] Exempt Disability Benefits
---------------[i] Types of Exempt Disability Benefits
---------------[ii] Workers’ Compensation
---------------[iii] Tort Judgments or Settlements for Disability
---------------[iv] Structured Settlements
---------------[v] Interest, Medical Expenses, and Attorneys Fees
----[14] Reverse Mortgages: Drawing Retirement Funds from Home Equity
----[15] Tax Treatment of the Sale of a Retiree's Residence
----[16] Minimizing the Tax on Net Investment Income
§ 1.03 Beneficiary Tax Planning
-----[1] Tax Deferral Planning Generally
-----[2] Tax Deferral Planning for Surviving Spouse Who Is Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning for Spouses
----------[b] Spousal Choice of Five-Year Rule or Life Expectancy Rule
---------------[i] Death in Calendar Year before Year Attaining Age 65 ½.
---------------[ii] Death in Calendar Year Attaining Age 65 ½ or in Subsequent Years
---------------[iii] Limited Period for Choosing Distribution Rule
----------[c] Spousal Election to Own IRA or Roth IRA
---------------[i] Spousal Ownership of Roth IRAs
---------------[ii] Spousal Ownership of IRA; Spouse Younger than Decedent
---------------[iii] Spousal Ownership of IRA; Spouse Older than Decedent
---------------[iv] IRA or Roth IRA Ownership Election for Young Surviving Spouse?
---------------[v] Alternative Where IRA Ownership Election Not Available
---------------[vi] Interest of Surviving Spouse in a Qualified Retirement Plan
--------------------[A] Tax-Free Rollovers to Spouses' IRAs or Roth IRAs
--------------------[B] Tax-Free Rollovers to Spouses' Retirement Plans
--------------------[C] TQR Contributions to Spouses' Roth IRAs
----------[d] Surviving Spouse’s Designation as Owner or Beneficiary After Rollover
-----[3] Tax Planning if Spouse Is Not a Beneficiary or Is Not the Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning
---------------[i] Comparison of the Five-Year Rule and the Life Expectancy Rule
---------------[ii] Choice of the Five-Year Rule or the Life Expectancy Rule
---------------[iii] Limited Period for Choosing Distribution Rule
----------[b] Rollovers by Beneficiaries
-----[4] Advantages of Establishing Separate Accounts for Beneficiaries
-----[5] Advantages of a Trust as the Beneficiary of a Plan or Arrangement
----------[a] Choosing a Trust as Beneficiary of a Plan or Arrangement
----------[b] Designated Beneficiary Exception for Certain Trusts
----------[c] Use of Conduit or Grantor Trusts
----------[d] Use of Other Trusts with Identifiable Beneficiaries
----------[e] Use of Powers of Appointment
----------[f] Use of Other Trusts with Identifiable Beneficiaries
----------[g] Separate Accounts, Separate Trusts, and Subtrusts
----------[h] Special Needs Trusts: Structuring and Funding
----------[i] Elimination of Beneficiaries Before Finally Determining Designated Beneficiaries
----------[j] Payment by a Trust of Estate's Expenses, Creditors, and Taxes
-----[6] Use of Disclaimers to Lengthen Tax Deferral for Beneficiaries
-----[7] Planning to Reduce Federal Estate Taxes
-----[8] Designation of Charity as a Beneficiary
-----[9] Advantages of Personally Purchasing an Annuity
----[10] Beneficiary Elections for Unfunded Nonqualified Plans
----[11] Rollover of Military Death Gratuities and Life Insurance Proceeds
----[12] National Guardsmen or Reservists Dying or Injured on Active Duty
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RETIREMENT TAX PLANNING SUMMARY
§ 1.01 Initial Tax Planning for Retirement
-----[1] Initial Considerations for Tax Planning for Retirement
-----[2] Payment Options Under Employer Retirement Plans
----------[a] Payment Options in General
----------[b] Non-tax Considerations Affecting Choice of Payment Option
----------[c] Taxation of an Annuity Payable over One or More Lifetimes
----------[d] Taxation of Required Spousal Annuities
----------[e] Taxation of Distributed Annuity or Life Insurance Contracts
----------[f] Taxation of a Lump Sum Distribution of the Entire Amount of Benefits
----------[g] Taxation of a Lump Sum Distribution of a Portion of Total Benefits
----------[h] Distribution of Employer Securities
----------[i] Payment Elections Under Eligible Exempt Organization Plans
----------[j] Payment Elections Under Unfunded Nonqualified Plans
----------[k] Qualified Retirement Plan Annuity Earned Substantially Outside U.S
----------[l] U.S. Government Benefits Payable to Foreign Persons
-----[3] Transfers from Employer Retirement Plans to IRAs
----------[a] Transfers from Employer Retirement Plans to IRAs Generally
----------[b] Employer Plans Qualifying for Tax-Free Transfers to IRAs
----------[c] Tax-Free Trustee-to-Trustee Transfers from a Plan to an IRA
----------[d] Tax-Free Indirect Rollovers from a Plan to an IRA
----------[e] Retention or Transfer of Investment in the Plan
----------[f] Transfer of Employer Securities
----------[g] Timing of Transfers from a Qualified Plan to an IRA
----------[h] Transfers from Retirement Plans to IRAs by Surviving Spouse
-----[4] IRA Rollovers to Qualified Retirement Plans
-----[5] Avoiding the Penalty on Certain Early Distributions
----------[a] The Penalty Tax and Exceptions
----------[b] Avoiding the Penalty Using Substantially Equal Periodic Payments
----------[c] Avoiding the Penalty by Purchasing a Single-Premium Immediate Annuity
----------[d] IRA Funds Transferred to an Employer Plan to Avoid the Penalty
----------[e] IRA Conversion While Receiving Substantially Equal Periodic Payments
----------[f] Retention or Transfer of Investment in the Plan
----------[g] Young Surviving Spouse
----------[h] Early Retirement of a Police Officer, Firefighter, or Emergency Medical Worker
§ 1.02 Tax Planning During Retirement Years
-----[1] Funds in Tax-Favored Plans Contributed to Roth IRAs or Roth Accounts
----------[a] Taxable Qualified Rollover (TQR) Contributions to Roth IRAs
----------[b] Long-term Tax Savings Due to Tax Rate Differential
----------[c] Long-term Tax Savings Due to Transfer of High Income Assets
----------[d] Transfers to Roth IRAs When Funds Not Needed in Retirement
----------[e] Retention of Funds in Both Regular IRAs and Roth IRAs
----------[f] Potential Collateral Benefits of TQR Contributions
----------[g] Satisfying the Conditions Imposed on TQR Contributions
----------[h] Trustee-to-Trustee TQR Contributions to a Roth IRA
----------[i] Indirect TQR Contribution from a Tax-Favored Plan to a Roth IRA
----------[j] Choice of Qualified Plan or IRA for Making a TQR Contribution
----------[k] IRA Conversion While Receiving Substantially Equal Periodic Payments
----------[l] Reversals of TQR Contributions to Roth IRAs
----------[m] TQR Contributions by Surviving Spouses
----------[n] TQR Contributions to Designated Roth Accounts
-----[2] Nontaxable Rollovers from Designated Roth Accounts
----------[a] Designated Roth Accounts Within Cash or Deferred Arrangements
----------[b] Rollovers from Designated Roth Accounts to Other Roth Accounts
----------[c] Rollovers from Designated Roth Accounts to Roth IRAs
----------[d] Choice of Rollover to another Designated Roth Account or to a Roth IRA
-----[3] Planning for Required Minimum Distributions
----------[a] Required Minimum Distribution Rules Generally
----------[b] Choice of Annuity or Non-Annuity Minimum Distributions
----------[c] Planning Non-Annuity Distributions for the First Minimum Distribution Year
----------[d] Planning Non-Annuity Distributions for Married Individuals
----------[e] IRAs and Plans Making both Annuity and Non-Annuity Minimum Distributions
-----[4] Tax Planning for Spousal Annuities
----------[a] Two Types of Spousal Annuities: QJSAs and QPSAs
----------[b] Tax Deferral for Participants
----------[c] Tax Deferral for Surviving Spouses
----------[d] Dealing with Refusal to Consent
----------[e] Marriage and Divorce Planning
-----[5] Temporary Personal Use of Rolled-Over Funds
-----[6] The Nontaxable Portion of Social Security Benefits
----------[a] Lowering Taxes on Social Security Benefits Generally
----------[b] Lump Sum Payment of Prior Year Social Security Benefits
-----[7] The Nontaxable Portion of U.S. Military Disability Pay
-----[8] Plan Insurance Premium Payments for Retired Police, Firefighters, etc.
-----[9] Deductions for Long-Term Care Services
----[10] Long-Term Care Insurance
----[11] Fees Paid to Continuing Care Retirement Communities
----[12] IRA Distributions Paid Directly to Charities
----[13] Payments for Long-Term Disability
----------[a] Sourced Disability Payments
---------------[i] Taxable in Proportion to Employer Contributions
---------------[ii] Conversions to Retirement Benefits
---------------[iii] Corrections of Employer Errors or Methodology
----------[b] Exempt Disability Benefits
---------------[i] Types of Exempt Disability Benefits
---------------[ii] Workers’ Compensation
---------------[iii] Tort Judgments or Settlements for Disability
---------------[iv] Structured Settlements
---------------[v] Interest, Medical Expenses, and Attorneys Fees
----[14] Reverse Mortgages: Drawing Retirement Funds from Home Equity
----[15] Tax Treatment of the Sale of a Retiree's Residence
----[16] Minimizing the Tax on Net Investment Income
§ 1.03 Beneficiary Tax Planning
-----[1] Tax Deferral Planning Generally
-----[2] Tax Deferral Planning for Surviving Spouse Who Is Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning for Spouses
----------[b] Spousal Choice of Five-Year Rule or Life Expectancy Rule
---------------[i] Death in Calendar Year before Year Attaining Age 65 ½.
---------------[ii] Death in Calendar Year Attaining Age 65 ½ or in Subsequent Years
---------------[iii] Limited Period for Choosing Distribution Rule
----------[c] Spousal Election to Own IRA or Roth IRA
---------------[i] Spousal Ownership of Roth IRAs
---------------[ii] Spousal Ownership of IRA; Spouse Younger than Decedent
---------------[iii] Spousal Ownership of IRA; Spouse Older than Decedent
---------------[iv] IRA or Roth IRA Ownership Election for Young Surviving Spouse?
---------------[v] Alternative Where IRA Ownership Election Not Available
---------------[vi] Interest of Surviving Spouse in a Qualified Retirement Plan
--------------------[A] Tax-Free Rollovers to Spouses' IRAs or Roth IRAs
--------------------[B] Tax-Free Rollovers to Spouses' Retirement Plans
--------------------[C] TQR Contributions to Spouses' Roth IRAs
----------[d] Surviving Spouse’s Designation as Owner or Beneficiary After Rollover
-----[3] Tax Planning if Spouse Is Not a Beneficiary or Is Not the Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning
---------------[i] Comparison of the Five-Year Rule and the Life Expectancy Rule
---------------[ii] Choice of the Five-Year Rule or the Life Expectancy Rule
---------------[iii] Limited Period for Choosing Distribution Rule
----------[b] Rollovers by Beneficiaries
-----[4] Advantages of Establishing Separate Accounts for Beneficiaries
-----[5] Advantages of a Trust as the Beneficiary of a Plan or Arrangement
----------[a] Choosing a Trust as Beneficiary of a Plan or Arrangement
----------[b] Designated Beneficiary Exception for Certain Trusts
----------[c] Use of Conduit or Grantor Trusts
----------[d] Use of Other Trusts with Identifiable Beneficiaries
----------[e] Use of Powers of Appointment
----------[f] Use of Other Trusts with Identifiable Beneficiaries
----------[g] Separate Accounts, Separate Trusts, and Subtrusts
----------[h] Special Needs Trusts: Structuring and Funding
----------[i] Elimination of Beneficiaries Before Finally Determining Designated Beneficiaries
----------[j] Payment by a Trust of Estate's Expenses, Creditors, and Taxes
-----[6] Use of Disclaimers to Lengthen Tax Deferral for Beneficiaries
-----[7] Planning to Reduce Federal Estate Taxes
-----[8] Designation of Charity as a Beneficiary
-----[9] Advantages of Personally Purchasing an Annuity
----[10] Beneficiary Elections for Unfunded Nonqualified Plans
----[11] Rollover of Military Death Gratuities and Life Insurance Proceeds
----[12] National Guardsmen or Reservists Dying or Injured on Active Duty
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| Copyright © 2005-2011 by Vorris J. Blankenship All Rights Reserved |
The author intends that this website provide accurate and authoritative information on the subject
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
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