Individual Retirement Arrangements (IRAs)

• § 5.01 Overview of Taxation of Participants in IRAs
• —–[1] Taxable Portions of IRA Distributions
• —–[2] Penalty 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] Assignment of Rights in an IRA
• —–[8] Effect of Loans or Pledges
• —-[9] Surviving Spouse Election to Become Owner
• —-[10] Transfers Incident to Divorce or Legal Separation
• —-[11] Exempt Charitable Organization as an IRA Beneficiary
• —-[12] 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 Penalty on Premature IRA Distributions
• —–[1] Penalty Generally Applies in the Absence of an Exception
• ———-[a] Penalty 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] Qualified Birth or Adoption Distributions
• ———-[k] Emergency Personal Expense Distributions
• ———-[l] Domestic Abuse Distributions
• ———-[m] Income Attributable to Corrective Distributions of Excess Contributions to IRAs
• ———-[n] Distributions to Terminally Ill Individuals
• ———-[o] Distributions for Qualified Federally Declared Disasters
• ———-[p] Other Specific Exceptions
• ———-[q] Other Attributes of the Homebuyer, Education, and Medical Expense Exceptions
• —–[2] Other Considerations in Applying the Penalty 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 Penalty
• ———-[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 Plan
• —–[5] Withdrawal of 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 Rollovers to a Different IRA or Employer Plan
• —–[1] Tax-Free Rollovers 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] Self-Certification of Permissible Reasons for Violating the 60-Day Requirement
• ———-[d] 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
• ———-[a] Benefits and Requirements for IRA Rollovers to Qualified Retirement Plans
• ———-[b] Arguments for IRA Retention of Investment Unlikely to Prevail
• ———-[c] Examples Illustrating the Foregoing Discussion
• ———-[d] The Separate Treatment of IRA Distributions Rolled over to a Qualified Plan

• § 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 IRA Contributions by Retirees Working Part-Time

• § 5.12 Mitigation of the Excise Tax on Excess Contributions to IRAs
• —–[1] Origins of a Retiree’s Excess Contributionsto IRAs
• —–[2] Eliminating Excess Contributions by Making Corrective Distributions
• —–[3] Eliminating Excess Contributions by Making Dollar-Limited Distributions
• —–[4] Eliminating Excess Contributions by Making Ordinary Distributions
• —–[5] Eliminating Excess Contributions by Absorption
• —–[6] Eliminating Excess Contributions by Recharacterization
• —–[7] Summary: Excess Contributions Due to Regular Contributions to Traditional IRAs
• —–[8] Summary: Excess Contributions Attributable to Failed Rollovers to Traditional IRAs

• § 5.13 Tax-Free Restorative Payments

• § 5.14 Enhancement of an Annuity Contract on Demutualization of the Issuer

• § 5.15 Applicability of Community Property Laws to IRAs

• § 5.16 Tax Withholding from IRA Distributions

• § 5.17 Tax on Net Investment Income Not Applicable

• • § 5.18 Estate or Gift Tax Imposed on IRA Benefits

» Chapter 6 – ROTH IRAs