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Jan 1, 2012 12:00 PM
The Economy and Other Retirement Account Mysteries
Coping with the unexpected, the incomprehensible and the unthinkable kept practitioners on their toes in 2011
The economy and the markets were major factors in retirement plans last year. Roth individual retirement account 2010 conversions were recharacterized in the wake of declining account values. And during desperate times, some IRA owners were victimized. On the bright side, the income tax cost of converting to a Roth IRA, including reconverting a recharacterized Roth IRA, will remain constant through the end of 2012, with the top tax rates set at 35 percent. After that, the Bush tax cuts are slated to expire, sending the top rates back up to 39.6 percent, unless Congress intervenes. Whether they will intervene remains a mystery.
The Internal Revenue Service has proposed regulations on alternate valuation elections for retirement accounts. Market declines invariably cause some estates to make this election by choosing to value the assets on the alternate valuation date (AVD), instead of on the decedent's date of death (DOD). The AVD is the date when an asset that was part of the decedent's estate is distributed, sold, exchanged or otherwise disposed of. Otherwise, the AVD is six months after the DOD.
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| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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