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Congress Fires Warning Shot At Stretch IRAs, Threatens 5-Year Rule For All
Nerd's Eye view ^ | 2/9/12

Posted on 02/12/2012 9:32:09 AM PST by Track9

The "stretch IRA" is a popular estate planning strategy, where the (typically non-spouse) beneficiary of the IRA stretches out required minimum distributions over his/her life expectancy; with a young beneficiary, such as a child or even grandchild, this can result in decades of tax deferral for a large portion of an inherited IRA. However, the planning technique may soon come to an end. As a part of the "Highway Investment, Job Creation and Economic Growth Act of 2012" to reauthorize and replenish the Highway Trust Fund for interstate highway projects, Senate Finance Committee Chairman Max Baucus (D-Mont.) has proposed a provision that would require inherited IRAs to be distributed within 5 years of the original owner's death, eliminating the ability to stretch. If passed, the new rules would take effect for all deaths that occur beginning in 2013. While the legislation - and the amendment to require IRAs to be liquidated within 5 years after death - is still just proposed at this point, and may not ultimately pass in its current form, the fact that an elimination of the stretch IRA rules was on the table at all suggests that the window may soon close on this particular planning technique.

(Excerpt) Read more at kitces.com ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: ira; stretchira
(Editor's Note: It appears that as of Friday, February 10th, this anti-stretch-IRA provision has been removed from the Senate version of the Highway Act now heading into full chamber reconciliation. However, in response to questions about the potential curtailment of IRAs, and echoing the public policy concerns noted in this blog, Baucus stated "IRAs were meant to be used for retirement. The inherited IRAs are being used not as a retirement tool but more like an estate-planning tool." Which means there's a good chance we'll see this rule crop up again in another piece of legislation sometime in the next year or two.)
1 posted on 02/12/2012 9:32:10 AM PST by Track9
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To: Track9

Bacchus needs to spend more time with his family and stop with the ‘rat Agenda 21 plans and all.


2 posted on 02/12/2012 9:37:12 AM PST by Paladin2
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To: Track9

Bacchus needs to spend more time with his family and stop with the ‘rat Agenda 21 plans and all.


3 posted on 02/12/2012 9:37:18 AM PST by Paladin2
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To: Track9
Keep it up Washington....

Photobucket

4 posted on 02/12/2012 9:43:17 AM PST by EGPWS (Trust in God, question everyone else)
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To: Track9

No man’s life, liberty or property are safe as long as congress is in session...


5 posted on 02/12/2012 9:48:20 AM PST by null and void (Day 1118 of America's ObamaVacation from reality [Heroes aren't made, Frank, they're cornered...])
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To: Track9

Well heck. Why don’t we just give everyone the same retirement options that Congress gets?


6 posted on 02/12/2012 9:53:07 AM PST by rfreedom4u (Just because someone thinks it's a good idea doesn't make it legal.)
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To: null and void
No man’s life, liberty or property are safe as long as congress is in session...
Samual Clements (Mark Twain :) was right...esp. w/E-Party in control.

7 posted on 02/12/2012 9:55:40 AM PST by skinkinthegrass (Kill the terrorists, Protect (all) the borders, ridicule all the (remaining) Liberals :^)
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To: EGPWS

You’re dreaming. A nice dream but a dream just the same.


8 posted on 02/12/2012 10:01:23 AM PST by Sequoyah101 (Half the people are below average.)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks Track9.
Thanks Vintage Freeper for posting this:

Debt Ceiling Debate in a Nutshell | Creators.com | 07/29/2011 | Chip Bok | Posted on 07/30/2011 12:12:11 PM PDT by Vintage Freeper

9 posted on 02/12/2012 10:16:26 AM PST by SunkenCiv (FReep this FReepathon!)
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To: SunkenCiv

Remember:

Jesus said “OCCUPY til I come”


10 posted on 02/12/2012 10:25:57 AM PST by editor-surveyor (No Federal Sales Tax - No Way!)
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To: SunkenCiv

Remember:

Jesus said “OCCUPY til I come”


11 posted on 02/12/2012 10:26:09 AM PST by editor-surveyor (No Federal Sales Tax - No Way!)
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To: Track9

Well there they go again. The grave robbers of Congress never sleep.


12 posted on 02/12/2012 10:59:37 AM PST by Enterprise ("Those who can make you believe absurdities can make you commit atrocities." Voltaire)
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To: Track9

Gee, that makes a lot of sense!

Make a major change in IRA law, and attach it to a Highway funding bill!

Sure,
I see the logic. Granddad is in a hearse, on public roads, therefore his IRA is fair game for the scumsuckers to raid.

Are we all screwed yet???


13 posted on 02/12/2012 4:39:44 PM PST by Noob1999 (Loose Lips, Sink Ships)
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To: Enterprise
It's a RETIREMENT account. The deceased is permanently retired.

Requiring disbursement to the heir(s) and closure within five years of death is hardly draconian.

14 posted on 02/12/2012 8:16:01 PM PST by newzjunkey (You want Romney vs Santorum? The establishment wins either way.)
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To: newzjunkey
"Requiring disbursement to the heir(s) and closure within five years of death is hardly draconian."

How about giving the heir the choice of when the funds are disbursed? Would that be too draconian also? The only thing that really needs to be required is for Congress to butt the hell out.

15 posted on 02/12/2012 8:48:47 PM PST by Enterprise ("Those who can make you believe absurdities can make you commit atrocities." Voltaire)
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