Jan 1, 2011 12:00 PM

Practitioners had a lot to contend with last year, like the expansion of designated Roths and the IRS' refusal to recognize trust reformations

By Michael J. Jones

In 2010, the legislature, Internal Revenue Service and courts were busy dealing with retirement benefit issues. Congress expanded designated Roth accounts (DRACs) to church and governmental plans and gave employees who participate in elective deferral plans the ability to make a conversion to a DRAC maintained by the same employer. In the courts, a surviving spouse unsuccessfully sought to apply the Employee Retirement Income Security Act (ERISA) mandates to an individual retirement account; another surviving spouse was subject to the 10 percent tax on early distributions; and a taxpayer's scheme to use life insurance to reduce an IRA's income taxes failed. Both a court and a private letter ruling explored the effect of state “slayer statutes” on IRAs. In other PLRs, the IRS ignored Supreme Court precedent in refusing to recognize a trust reformation for purposes of applying required minimum distributions (RMD) rules and confirmed that the transfer of two IRAs to a foundation will incur no income tax.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010¹ extends qualified charitable distributions (QCDs) to 2010 and 2011. QCDs are direct IRA distributions (except from SIMPLE IRAs and simplified employee pensions) to a qualifying charity of up to $100,000 during a tax year. (For married individuals filing a joint return, each spouse may contribute up to $100,000.)

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

Click here to download the 2011 Trust Glossary

50 Years Ago This Month

Click here to read the issue.

50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

Click here to view the most up to date guide (September 2011)

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