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Celebrating
our 25th Anniversary
Bequesting an IRA to nonspousal
beneficiaries
Nonspousal beneficiaries can’t roll an inherited traditional IRA into
one of their own. But they can prolong the IRA’s life for years by
stretching required distributions over their own life expectancies.
Typically, this is done by establishing a special IRA that remains in
your name but is “for the benefit of” your heir. These accounts go by a
number of different names, including stretch IRA, legacy IRA, dynasty
IRA and inherited IRA beneficiary distribution account.
If you name multiple nonspouse beneficiaries, they can split the IRA
into separate accounts. This allows each child, for example, to take
distributions based on his or her own life expectancy. If they don’t
split the IRA, minimum withdrawals will be based on the oldest
beneficiary’s life expectancy, and the funds will be distributed more
quickly.
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Prescription buyers beware of
cyber wolves
To get around the high cost of prescription medications,
many consumers have resorted to filling their prescriptions
online or going over the border and buying their meds in
other countries. But is this wise? The U.S. Food and Drug
Administration is warning consumers to think twice before
getting prescriptions filled in this manner. This brief, but
informative, article offers tips that will help you protect
yourself from cyber wolves in the prescription-filling
business. For example, avoid sites that fill first-time
prescriptions without requiring you to get a physical exam
or promote new miracle or instant cures for conditions.
Read more
More than just a trip to the
mall
Planning for your 2006 asset purchases
The start of a new year is a great time to begin planning
asset purchases so you receive the most advantageous tax
treatment. For example, timing asset purchases is critical
because the start of depreciation, as well as when certain
tax incentives become available, is based on when the asset
is placed in service. This article discusses what to do and
what not to do when buying large ticket items in 2006. It
also covers the increased Section 179 expensing election and
a fast-approaching deadline for the incentive to return to a
lower amount, and how conducting a cost segregation study
can help you accelerate depreciation on certain assets.
Read more
Tax Tips
This section presents brief notes on the deduction for bad
debts, captive insurance companies, and the annual gift tax
exclusion.
Read more
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Breathe new life into a
traditional IRA
Careful planning can provide continued
tax-deferred growth for your beneficiaries
As the name “individual retirement account” (IRA)
suggests, the primary purpose of an IRA is to save for
retirement. But IRAs — which often accumulate enormous
amounts of wealth — can also be a significant part of
the legacy you leave to future generations.
Unfortunately, that legacy may be burdened with a huge
tax liability if your IRA is a traditional one, not a
Roth. This article reviews how, with careful planning,
you and your heirs can stretch a traditional IRA’s
tax-deferred growth for years or even decades while
minimizing the tax impact.
Read more |
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