Tax Planning for Retirees

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

» Chapter 6 – ROTH IRAs