Trust as the IRA Beneficiary: The RMD Conduit Trust
If you have an individual retirement account or IRA, you should have a plan for how the account’s assets will be distributed after you die. There are a number of tax planning strategies that can be...
View ArticleERSOP Plans as a Financing Alternative for Start-ups
Starting a new business can be an exciting and challenging endeavor, but financing the venture can often prove to be a significant obstacle. Traditional lenders typically require a business to be...
View ArticleIRA Beneficiary Designation Planning Opportunities
Designating a beneficiary for an IRA may not be a top priority for most IRA owners, and even those who do give it some thought may not have planned it correctly due to the complex rules surrounding IRA...
View ArticlePart-Time Employee Not Entitled to IRA Contribution Deduction
Taxpayers who participate in their employer’s retirement plan are not able to deduct contributions the taxpayer makes to their IRA retirement account. This is also true for taxpayers who are entitled...
View ArticleWhen Tax-Free IRA Rollovers as Short-Term Loans Fail: Two Examples
Taxpayers often withdraw funds from their IRAs to cover short-term expenses with the hope that they can put the funds back in their IRA within the 60-day window for making a tax-free IRA rollover. This...
View ArticlePersonal Guarantees for Self-Directed IRAs Are Prohibited Transactions
If you have a self-directed IRA, the IRA invests in LLCs, can you personally guarantee a loan for the LLC? The court addressed this in Peek v. Commissioner, 140 T.C. 12. Facts & Procedural History...
View ArticlePromissory Notes Distributed by Self-Directed IRA Were Not Worthless
Self-directed IRAs are usually profitable. But there are times when they lose money. In Berks v. Commissioner, Docket No. 26883-11S, the U.S. Tax Court addressed a situation where the IRAs held...
View ArticleSelf-Directed IRA can Flip Houses & Share Ownership of Property
In In re Cherwenka, the U.S. Bankruptcy Court for the Northern District of Georgia concluded that house flipping activities in a self-directed IRA and shared ownership of property with the IRA and the...
View ArticleSelf-Directed IRA Purchase of Real Estate is Taxable
Self-directed IRAs present a number of opportunities. But what if the self-directed IRA custodian chooses to limit the account holder’s options? Can the IRA account holder go around the custodian’s...
View ArticleLLC Owned by Self-Directed IRA Cannot Pay Wages
The U.S. Court of Appeals for the Eleventh Circuit recently affirmed Ellis v. Commissioner, which held that the payment of wages for services to a self-directed IRA owner for his services rendered to...
View ArticleUsing IRA Funds to Settle a Probate Dispute
Inherited IRAs can present a number of challenges. In Ozimkoski v. Commissioner, T.C. Memo. 2016-228, the court considered the tax implications of a withdraw from an inherited IRA that was used to...
View ArticleAppeals Court Upholds IC-DISC Roth IRA Tax Strategy
The Sixth Circuit Court of Appeals upheld the IC-DISC Roth IRA tax strategy in In Summa Holdings, Inc. v. Commissioner, No. 16-1712 (2017). This tax strategy allows business owners to sidestep the...
View ArticleTax Court Says Royalties Paid to Roth IRA Were Excess Contributions to IRA
The U.S. Tax Court recently issued another opinion involving a LLC owned by a self-directed IRA. The case is Block Developers, LLC v. Commissioner, T.C. Memo. 2017-142. The case invovles an IRA LLC...
View ArticleEstablishing Tax Basis in IRA Contributions
Contributions to IRAs are deductible. If not deductible, the taxpayer has basis in his IRA so that this amount is not taxable when taken out of the IRA. The idea is that the taxpayer probably paid...
View ArticleEarly IRA Distribution, Gambling Not a Disability
Early distributions from IRAs are subject to a 10 percent additional tax. The 10 percent additional tax does not apply if the distribution is taken when the IRA owner is disabled. The recent Gillette...
View ArticleBig Tax Savings With ESOP, But Requires Work
An employee stock ownership plan (ESOP) can produce significant income tax savings. This tax savings isn’t exactly free. One has to keep up with the ESOP and the relevant rules to ensure that the tax...
View ArticleAvoiding the 60-Day IRA Rollover Requirement
If a taxpayer takes money out of their retirement account, they generally have to pay income tax on the amount distributed. What if the taxpayer wants to put the money back into the account? There have...
View ArticleFixing Self-Directed IRA Errors
There are ways to structure transactions to avoid income taxes. Creative taxpayers and tax attorneys have used qualified retirement accounts for this purpose (the tax savings from ESOPs is an example)....
View ArticleCan a Self-Directed IRA Hold Gold Coins?
Precious metals IRAs are popular. This includes silver IRAs, gold Roth IRAs, and even gold-backed IRAs. These accounts allow investors to invest in these alternative assets. This in turn allows the...
View ArticleIs Military Pension Taxable (Answered)
There are a number of tax breaks afforded to those in the military. This includes collection holds on unpaid taxes owed by members of the military to laws that exempt certain income from tax...
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