Posted on 04/08/2014 3:04:48 AM PDT by Red in Blue PA
How does this provide money to the government?
It appears to me that it is a restriction on the use of the funds bound up in an individuals IRA’s but they remain intact and shielded from the tax.
If you read the case linked in the story, the guy that lost was an attorney specializing in tax law. It looks like the original dispute was over transferring money back in to the accounts in the 60 day time frame. The court came back and said by the way you only get 1 rollover per 12 month period when taking the cash directly..
No... But they will direct you to a nice government store where you can buy a wheelbarrow. Of course you will need a pickup truck full of those nice shiny bonds, but hey! The pictures will be really cool!
The court in this case probably made the correct ruling. One of the problems you have is that Congress often drafts laws that are so muddy and vague that agencies like the IRS are left to issue "publications and regulations" to explain what the stupid tax code even means.
Maybe just as well that I never had an IRA though I have looked into since I am gainfully employed for however long it lasts.
We have no laws. We have Diktats, Führer Weisung, and Ukase.
Oh, especially Roth IRAs. I have contemplated moving into, or starting a Roth IRA/401(k), but I don't trust the government to allow me tax-free income on those savings down the road.
The left has this concept about taxation that as long as you can justify it, it should be taxed. It makes no difference IF it should be taxed, or WHETHER the revenues are needed, or WHY someone should be taxed over another...
Since IRAs have been around quite awhile I find it hard to believe this is the first guy that’s done this.
Has anyone else out there done this and NOT get questioned about it?
I never have but I wonder if the “per IRA” is actually in the context of individual people, not individual accounts, i.e., husband and wife IRAs are distinct, but husbands T.RowePrice and Vanguard IRAs count as one.
I don’t know. Just askin’.
Contradiction?... You can call the IRS 5 times on any tax question, and get 5 different answers.
That’s why you don’t call the IRS with tax questions. I use a professional accountant for my taxes, and he’s on the hook for any taxes, penalties, etc. if I’m audited and the IRS finds a problem.
It will be a cold day in hell before I let an acct. do my taxes. I’ve gotten to this level of knowledge of financial competence for a reason.
Actually it affects only those relatively few people who have MULTIPLE IRA's and who rollover more than one of those IRA's into new IRA's in a year. I would be considered "upper middle class" and I don't have multiple IRA's.
So? They have regulatory authority and surprise surprise, they’re regulating. I didn’t complain when they changed the rules allowing you to have more than 1 IRA and I’m not complaining when they’ve surreptitiously changed it back.
More of a curiosity for me is all the Millionaires and Millionairess’s that made their fortunes while working for government agencies.
Perhaps you can tell us why would one want to ‘rollover’ more than 1 IRA a year? How does this affect even 25% of the taxpayer’s? You can still transfer IRA’s without any tax implications.
What their doing is getting rid of a shell game and IRA rollover kiting. Take a distribution of IRA #1 and within the rollover period of IRA #1, taka a distribution of IRA #2 and use it as the rollover money for IRA #1, Those blessed with 6 IRAs can continue this game without any tax implications. Which effectively lets the owner take a distribution without paying taxes on money they put away tax free.
I took a rollover when I bought my home. I used the distribution as a down payment and then kept adding money to my IRA until I officially was “rolled over”. This was one you could only have 1 IRA and If I recollect, for short period of time you couldn’t have an IRA and a 401K. Like I said, it was a very short time and was changed CIRCA: Reagan era.
+1 answer, even so, I don’t believe it.
Here, read up on this article and tell me what has fundamentally changed .....
http://www.chicagotribune.com/business/yourmoney/chi-ym-cruz-1007oct07,0,4813127.story
“Doing a 60-day rollover is like playing Russian roulette with your retirement savings,” Slott said. You can avoid this risk by doing a so-called direct trustee-to-trustee IRA transfer without you ever getting your hands on any of the money.
And I’m sure a direct trustee-to-trustee IRA rollover is still an option. It’s only when the owner of the IRA ‘touches’ [emphasis mine] the disbursement.
How about the people who closed their IRA’s so that they could pay their medical expenses only to find themselves broke and now owing the Government taxes and penalties on it. Has that been fixed yet?
It won't if peopke know the new rules. But if someone doesn't and rollsover two different accounts he'll have to pay full income tax and a 10% penalty (if under 59 years old) on it. Surprise!
Also check to see if this rule change is matched with a CBO static analysis assuming that so many people will still do the same rollovers they have in the past, which means the government will get so much money over the next ten years so it can afford a new welfare program this year.
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