Individual Retirement Arrangements (IRAs)
- § 5.01 Overview of Taxation of Participants in IRAs
- —–[1] Taxable Portions of IRA Distributions
- —–[2] Additional Tax on Premature Distributions
- —–[3] Transfers from an IRA to Another IRA or Plan
- —–[4] Transfer from an IRA to a Health Savings Account
- —–[5] Taxation of Collectibles
- —–[6] Consequences of Prohibited Transactions
- —–[7] Deduction of Loss on Final Distribution
- —–[8] Assignment of Rights in an IRA
- —–[9] Effect of Loans or Pledges
- —-[10] Surviving Spouse Election to Become Owner
- —-[11] Transfers Incident to Divorce or Legal Separation
- —-[12] Exempt Charitable Organization as an IRA Beneficiary
- —-[13] Income Tax Withholding
- § 5.02 Definition and Categories of IRAs
- § 5.03 Administration of IRAs
- —–[1] General Administrative Considerations
- —–[2] Investment in Collectibles by Individual Retirement Accounts
- —–[3] Prohibited Transactions of Individual Retirement Accounts
- ———-[a] Prohibited Transactions Generally
- —————[i] Terminations of Some Individual Retirement Accounts
- —————[ii] Penalty Taxes Imposed for Other IRAs
- ———-[b] Prohibited Transactions
- —————[i] Prohibited Transactions Defined
- —————[ii] Loan or Extension of Credit
- —————[iii] Property Transactions and the Furnishing of Services
- —————[iv] Use of IRA by or for a Disqualified Person
- —————[v] Dealing with an IRA for a Fiduciary’s Own Interests
- —————[vi] Payments to Fiduciary by a Third Party Dealing with IRA
- —————[vii] Ownership Threshold in Entities Involved in Transaction
- —————[viii] Form 5329 and the Statute of Limitations
- ———-[c] Transactions Excluded from Prohibited Transactions
- ———-[d] Definition of Disqualified Person
- ———-[e] Definition of Fiduciary
- ———-[f] Status of the Retiree/Owner
- —–[4] Borrowing, Pledging, or Assignment of IRA Funds
- ———-[a] Treatment of Assigned IRA Funds
- ———-[b] Individual Retirement Annuity Loans and Pledges
- ———-[c] Individual Retirement Account Loans and Pledges
- ———-[d] Bankruptcy Proceedings
- ———-[e] Borrowing Non-IRA Funds to Contribute to an IRA
- —–[5] Unrelated Business Taxable Income
- —–[6] Retiree’s Payment of IRA Expenses
- —–[7] Applicability of the “Wash Sale” Rule to IRAs
- —–[8] IRA Provisions that Place Restrictions on Distributions
- —–[9] Self-Directed IRAs
- § 5.04 Additional Tax on Premature IRA Distributions
- —–[1] Additional Tax Generally Applies in the Absence of an Exception
- ———-[a] Additional Tax in General
- ———-[b] The Age and Death Exceptions
- ———-[c] The Disability Exception
- ———-[d] The Substantially Equal Payment Exception
- —————[i] Substantially Equal IRA Payments Generally
- —————[ii] Substantially Equal Annuity Payments
- —————[iii] Substantially Equal Non-Annuity Payments and Safe Harbors
- —————[iv] Tailoring the Source and Amount of Payments
- —————[v] Potential IRS Relief for Erroneous Payments
- —————[vi] Modifications of Payments Triggering Penalties and Interest
- ———-[e] Exception for First-Time Homebuyers
- ———-[f] Exception for Higher Education Expenses
- ———-[g] Exception for Medical Insurance Premiums of an Unemployed Taxpayer
- ———-[h] Distributions Not Exceeding Itemized Medical Deductions
- ———-[i] Distributions to Military Reservists
- ———-[j] Other Specific Exceptions
- ———-[k] Other Attributes of the Homebuyer, Education, and Medical Expense Exceptions
- —–[2] Other Considerations in Applying the Additional Tax and Exceptions
- ———-[a] Distribution of Funds Previously Rolled Over to an IRA
- ———-[b] Beneficiary Rollovers of Decedent’s IRA or Plan Funds
- ———-[c] Investments in Collectibles by IRAs
- ———-[d] Prohibited Transactions with IRAs
- ———-[e] IRA Loans and Pledges
- ———-[f] Involuntary Distributions
- ———-[g] Personal or Financial Hardship
- ———-[h] Deemed Distributions
- ———-[i] Harsher Penalty for Simple IRAs
- ———-[j] IRA Funds Transferred to an Employer Plan to Avoid the Additional Tax
- ———-[k] Form 5329 and the Statute of Limitations
- § 5.05 Taxation of IRA Distributions
- —–[1] General Rules for Taxation of IRA Distributions
- —–[2] Investment in IRAs
- —–[3] Nontaxable Portion of IRA Distributions
- —–[4] Timing of an IRA Distribution Relative to a Rollover from a Qualified Retirement Plan
- —–[5] Withdrawal of After-Tax Excess Contributions
- —–[6] IRA Distributions Not Taxed on Separate Return of Spouse
- —–[7] Deduction of Loss on Final Distribution
- —–[8] IRA Distributions Paid Directly to Charities
- —–[9] IRA Funds Transferred to a Health Savings Account
- § 5.06 Nontaxable Transfers or Rollovers to a Different IRA or Employer Plan
- —–[1] Tax-Free Transfers of Funds in General
- —–[2] Choice of Indirect Rollover or Trustee-to-Trustee Transfer
- —–[3] Requirements for an Indirect Rollover
- ———-[a] 60-Day Requirement
- ———-[b] Potential Waiver of the 60-Day Requirement
- ———-[c] Extension of the 60-Day Period for Frozen Accounts
- ———-[d] Self-Certification of Permissible Reasons for Violating the 60-Day Rollover Requirement
- ———-[e] Only One Indirect Rollover Per Year
- —–[4] Rollovers to Another IRA that Include Retiree Investment
- ———-[a] Components of a Distribution before Rollover
- ———-[b] Indirect Rollover to Another IRA
- ———-[c] Trustee-to-Trustee Rollover to Another IRA
- —–[5] Rollover within Two Years of Funds in a Simple IRA
- —–[6] Rollovers and Direct Transfers Available to Beneficiaries
- —–[7] IRA Rollovers to Qualified Retirement Plans and Eligible State/Local Plans
- ———-[a] Requirements for IRA Rollovers to Retirement Plans
- ———-[b] Separate Treatment of Distributions Rolled over to a Plan
- ———-[c] Arguments for IRA Retention of Investment Unlikely to Prevail
- § 5.07 Transfers of IRAs Incident to Divorce or Legal Separation
- § 5.08 Surviving Spouse’s Election to Become Owner of IRAs
- § 5.09 Inherited IRAs
- § 5.10 Exempt Charitable Organization as an IRA Beneficiary
- § 5.11 Tax-Free Restorative Payments
- § 5.12 Enhancement of an Annuity Contract on Demutualization of the Issuer
- § 5.13 Applicability of Community Property Laws to IRAs
- § 5.14 Tax Withholding from IRA Distributions
- § 5.15 Tax on Net Investment Income Not Applicable
- § 5.16 Estate or Gift Tax Imposed on IRA Benefits