Massachusetts Estate Planning & Asset Protection Blog

Supreme Court Case Puts Inherited IRAs at Risk!

Posted by Dennis Sullivan & Associates on Thu, Jan 15, 2015

Supreme Court Case Puts Inherited IRAs at Risk | Massachusetts Asset Protection Attorney



A landmark case before the U.S. Supreme Court holds that Inherited IRAs are not protected from creditors. One June 12, 2014 the U.S. Supreme Court handed down its opinion in Clark v. Rameker, which questioned whether or not an inherited IRA could be shielded from Bankruptcy. Heidi Heffron-Clark inherited an IRA from her mother in 2001 and filed bankruptcy 9 years later, the question was whether she could keep the assets held in the IRA.

The Court unanimously held that retirement funds inherited by a beneficiary from the original plan participant are not considered to be “retirement funds” within the meaning of the federal bankruptcy exemptions found at 11 U.S.C. §522(b)(3)(c).

A clear legal distinction was drawn between an inherited IRAs and those that you set up for yourself. An inherited IRA has several unique features that suggest they are not retirement assets, which were noted by the Court. Unlike IRA owners, inheritors can’t add additional funds to the account, but they can take out money at any time without penalty. Usually a participant’s own IRA is subject to early withdrawal penalties if taken out early, unlike an Inherited one. Generally, non-spousal beneficiaries of an IRA must either withdraw the entire amount within five years of the original owner’s date of death, or take out a minimum amount each year, starting by December 31 of the year after the date of death. This is true for both Roth and Traditional IRAs.

What You Can Do To Protect The Inheritance For Your Beneficiaries:       

The upshot is that Clark v. Rameker argues very strongly in favor of setting aside retirement accounts that will pass upon the death of the plan participant into a special type of trust designed to both protect inheritances from future creditors of the beneficiary, but also to ensure that the trust will qualify as a Designated Beneficiary under the Internal Revenue Code.

A Retirement Plan Trust can be created to protect all of your inheritable retirement accounts. In creating this type of trust, you are using the trust as your beneficiary instead of the individual. The beneficiary of the trust will be the original individual you wanted to benefit from your protected retirement account. This is what many would call a “work around”, which is possible even with the new supreme court case.

For more information on how to protect your IRAs, click here to download our Free Report on the IRA Protection and Maximization Trust.


At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.


Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Protective Trusts, trusts, Tax on IRAs, trust, IRA, Inheritance, Supreme court

Massachusetts Estate Planning Attorney | Naming the Right Beneficiary of Your Retirement Plan

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Feb 13, 2013

IRA, Retirment, Estate PlanningIRAs and other tax-deferred retirement accounts allow your savings to grow tax-free until you retire. At that point, typically the year after you become age 70 ½, you must begin taking required minimum distributions, on which you pay ordinary income taxes. The rest of the money in your account continues to grow tax-free until it is distributed to you. If you die before depleting your account, the balance of your account will go to the beneficiary you have named.

Naming the right beneficiary is critical. Most people want to continue the tax-deferred growth for as long as possible, paying the least amount in income taxes. This is called “stretching out” the account. Distributions after you die will be based on the new beneficiary’s age and life expectancy, so the younger the beneficiary (like a child or grandchild), the longer the stretch out potential.

However, naming a beneficiary outright has several disadvantages:

  • If the beneficiary is a minor, distributions will need to be paid to a guardian; if no guardian exists, one will have to be appointed by the court.

  • An older beneficiary can do whatever he/she wants with this money, including taking larger distributions or even cashing out the entire account and destroying your carefully made plans for long-term, tax-deferred growth

  • This money could be lost to the beneficiary’s creditors, spouse and ex-spouse(s).

  • There is the risk of court interference if your beneficiary becomes incapacitated.

  • Outright distributions could cause a beneficiary with special needs to lose valuable government benefits.

  • If your beneficiary is your spouse, he/she will be able to name a new beneficiary and is under no obligation to follow your wishes. This may not be what you want, especially if you have children from a previous marriage or you feel that your spouse may be too easily influenced by others after you are gone.

    •  Substantial amount of income taxes that would be due on a lump sum distribution.

Increased Control & Protection

Naming a trust as beneficiary will give you more control over, and protection for, these tax-deferred accounts. It should be a separate trust designed specifically for this purpose; because of the rules governing naming trusts as a beneficiary it should not be part of your revocable living trust or other trust. For this reason, these trusts are often called “stand-alone retirement trusts.”

Instead of required minimum distributions being paid directly to your beneficiary, they will be paid into the trust for the benefit of your beneficiary. The trust can either be mandated to pay these distributions directly to the beneficiary (called a conduit trust) or it can accumulate these distributions (called an accumulation trust) and pay out trust assets according to your instructions (for example, for higher education expenses, down payment on a home, etc.)

Specific benefits include:

  • No guardian is needed for minor children and there is no risk of court interference at the beneficiary’s incapacity. That’s because a trust, not the individual, is the named beneficiary.

  • Your beneficiary is prevented from cashing out or taking larger distributions, assuring the continuation of tax-deferred growth.

  • The account itself is protected from creditors and predators, even from divorce claims. However, if a conduit trust is used and distributions are required to be paid to the beneficiary, those distributions would be at risk. For maximum creditor protection, an accumulation trust is preferable.

  • You can name successor beneficiaries in the trust document and keep control over who will receive the proceeds if your initial beneficiary should die before the account is fully paid out.

  • An accumulation trust is typically used to provide for a beneficiary with special needs. Instead of the beneficiary receiving the required distributions as income (which could affect his/her ability to receive government benefits), the trustee can use discretion and provide for certain needs of the beneficiary as they arise, without jeopardizing their benefits.

In order to be accepted by the IRS, the trust must meet very specific requirements, and should be designed and written by an attorney who has experience in this area.

You’ve worked years to accumulate your tax-deferred plans. Naming the right beneficiary can preserve and continue the tax-deferred growth long after you’re gone, protect the assets from creditors and the courts, and provide for your loved ones the way you want.  

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your family and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Retirement, Estate Planning, family, 401(k), 529 plans, IRA, retirement plans

Massachusetts Estate Planning Attorney | Uncertainty Makes Tax Planning Tricky

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Nov 21, 2012

As recently reported in the Boston Globe, many investors and taxpayers are tackling a daunting task: trying to plot a post-election personal finance strategy as Washington debates the future of Bush-era tax cuts. If they make decisions now, they fear they might guess wrong. But if they wait for the politics to settle, they could get hit with big tax bills they might have avoided. This makes things very difficult.washingtondc

Taxpayers who would ordinarily be in the midst of their year-end planning find themselves in a quandary instead. The Bush tax cuts, which lowered rates and included other tax breaks, will expire December 31 of this year. President Obama and congressional leaders are negotiating whether to extend some or all of the tax cuts; if they deadlock, everyone’s taxes will go up in 2013.

The most likely increases include long-term capital gains taxes, income tax rates on the wealthiest Americans, and top rates on gift and estate taxes. Those are the areas where taxpayers – particularly couples with taxable income of more than $250,000 or individuals with more than $200,000 – are looking for planning advantages. Some may find them.

Take capital gains. The president wants the wealthiest Americans to pay a top rate of 20 percent on gains and selling stock and other investments, a rate which is up from the current 15 percent. Yet if the Bush tax cuts are not extended, middle-income taxpayers would see the rate they pay on capital gains rise to 20 percent as well. Also, some people in lower tax brackets, who are currently exempt from capital gains taxes, would face a 10 percent rate.

The likelihood of such increases means investors may want to sell appreciated stock this year. Some financial planning professionals have suggeted investors should only sell if it makes sense for nontax reasons, such as rebalancing a portfolio, diversifying holdings, or raising cash.

Ultimately with investment decisions,  you don’t want to let the tax tail wag the dog.

The fate of qualified dividends – which are currently taxed at a top rate of 15 percent – also has investors nervous. Without congressional action, the rates would rise between 28 and 31 percent for middle-income tax payers. President Obama wants to impose even higher rates on dividends earned by wealthy individuals and families, increasing the top rate to as high as 39.6 percent for couples with $250,000 of taxable income and individuals making $200,000.

That increased tax bite could make dividend-producing stocks less attractive, which in turn could depress prices. At the same time, municipal bonds may gain some luster since their interest in exempt from both federal income taxes and the new 3.8 Medicare tax. Under the federal health care overhaul, wealthy families and individuals will, for the first time, have to pay Medicare taxes on investment income that exceeds threshold amounts, starting in 2013.

Faced with the likelihood of higher tax rates, those at the top income levels find themselves in an unusual year-end planning position.

Usually you want to accelerate deductions and defer income to the subsequent tax year. I, this case, you may want to do the opposite. That might include such strategies as taking a bonus in 2012 rather than after the New Year or paying property taxes or state estimated income taxes after January 1. State and local taxes are deductible on federal returns, and such a strategy would lower taxable income next year when rates would be higher.

Trying to time deductions, however, comes with a caveat: Congress is considering capping deductions on the wealthiest taxpayers, potentially limiting the advantage of such tax planning. Looking ahead to next year, taxpayers facing rate increases may want to take full advantage of contributions  to retirement accounts, health savings accounts, and other vehicles that allow them to shelter pre-tax dollars and potentially stay in a lower tax bracket.

Financial specialists also agree that it’s a great time for the super wealthy to make gifts to children and other family members. That’s because the current estate and gift tax exemption of $5.12 million per person expires on December 31, 2012. It’s likely to be replaced with a new exemption of $3.5 million – or perhaps just $1 million – with estate tax rates possibly jumping to as high as 55 percent from the current 35 percent.

As a rule of thumb, taxpayers can assume that the outcome in Washington won’t lead to more favorable rates, but they can limit their guesses to about what political leaders might or might not do.

If you decide to take advantage of the current rules, fast action is required. There is not a lot of time left this year.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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Tags: Estate Planning, taxes, tax exemption, tax deductions, Obama, IRA, tax

The Roth 401(k), Tax Advantages over the Roth IRA

Posted by Dennis Sullivan & Associates on Thu, May 26, 2011


In today’s tax environment – namely, a relatively low tax rate today with the perhaps-inevitable prospect of higher tax rates in the future – many people are looking to the Roth IRA as a way to hedge their tax bets. With the Roth IRA, you pay your tax upfront on contributions to the account, and withdraw them tax-free during retirement.

You may want to investigate another lesser-known option available in many 401(k) plans called the Roth 401(k). Stuart Robertson of Forbes describes the Roth 401(k) as a Big Brother to the Roth IRA, saying the 401(k) version of the Roth is bigger and stronger in many ways than the IRA version. You can choose to put some, none or all of your contributions after-tax into your Roth 401(k) savings up to $16,500 a year in 2011, or $22,000 if you are 50 years of age or older. The Roth IRA maximum amounts are much lower: $5,000 and $6,000 if 50 or over respectively.

Additionally, the Roth 401(k) has no income limits. Unlike the Roth IRA, anyone can have a Roth 401(k), if their employer offers it. To invest in a Roth IRA and make the maximum contribution, your modified adjusted gross income must be below $107,000 if you are single, $169,000 if you are married filing jointly.

If your company does not offer a Roth option in your 401(k) plan, Robertson says you should request it. Typically, this requires an amendment to the plan, and only a minor cost to the business owner.

It’s anyone’s guess what tax rates will look like in the future, but if you believe they are only headed upward, then a Roth 401(k) may be a good way to hedge your tax bet.

For more information on tax planning, check out the Tax Planning Section of our website, and watch our video on Avoiding a 70% tax on IRAs and Retirement Plans.


Tags: Retirement, 401(k), Roth IRA, Tax on IRAs, IRA

Estate Planning Tip: Check Your Beneficiary Designations Annually

Posted by Dennis Sullivan & Associates on Tue, May 24, 2011

Proper planning can set your estate, your assets, and your family in line for a smooth transition but improper or incomplete planning can bring untold hardship, especially if the matter ends up in court. Courtesy of Bill Singer’s blog through Forbes, here’s another sad story to add to the file of otherwise avoidable legal woes. The entire story and Singer’s commentary are worth reading, but in essence it is the story of Financial Industry Regulatory Authority (“FINRA”) Arbitration 10-02435 (May 9, 2011), or the shortsightedness of one Newman Trowbridge, Jr, Esq.

Mr. Trowbridge opened an IRA in 1994 and named his then wife as beneficiary of the account. Then two things happened: (1) his IRA was taken over by Capital One and his account was reassigned to a new broker (Rick Schenck, Sr.) and (2) he and his then wife underwent what was apparently a terrible and protracted divorce. Mr. Trowbridge later re-married, put his life back together, and continued with his IRA with gusto (he quadrupled the balance) until he suddenly and tragically passed in 2009. At that time, Trowbridge’s estate went to his wife along with all the various accounts for which he named her as beneficiary, but the IRA went to his ex-wife. The story is familiar and you probably saw it coming, but Trowbridge had failed to reassign the beneficiary of his IRA and it has remained under his first wife.

Unfortunately, the story doesn’t end there since the recent widow had attempted to reclaim the IRA. She went so far as to present the broker with a court order stating that all accounts that make up the decedent’s estate must be transferred to the heirs of the decedent, but that didn’t work since the IRA isn’t a part of the estate to begin with. The broker defaulted to the named beneficiary, or the ex-wife. In response the widow tried suing on counts of negligence, amongst other things, since the broker had not carried out his duty by advising the late Mr. Trowbridge to rename his beneficiary. The suit is why this is the story of FINRA Arbitration 10-02435, and why it is all the more bitter since the widow lost the suit and it was held that the broker did his job (the case was even removed from his record.) Instead, the FINRA arbitration placed the blame squarely on Mr. Trowbridge, adding insult to injury since, we can presume and the court admitted, he probably didn’t intend to hand the IRA over to his ex-wife.

The lesson is three-fold.

1. Firstly, you must adapt your plans whenever you undergo a life-change, like renaming beneficiaries after divorces and marriages.

2. Secondly, planning is about making sure your affairs are in order before those plans are needed, that is, fully fleshing out your plans early so an unexpected death doesn’t keep you from finishing the most important details.

3. Finally, it’s a pretty tricky world when you try to undo the damages of incomplete or poor planning, and often an unforgiving one for your surviving family members and loved ones.

At Dennis Sullivan & Associates we have created the Lifetime Protection Program, to help  clients review their situation, including beneficiary designations. This is important because of changes in health, family, the law and finances.   To review your own planning, you can use our self-guided 19-Point Trust, Estate & Asset Protection Legal Guide

To learn more about protecting your home, spouse, family and life savings, attend a free, educational Trust, Estate & Asset Protection Workshop . Register online or call 800-964-4295.

Tags: Retirement, Estate Planning, Estate Planning, Lifetime Protection Program, IRA, Metro West Estate Plan, Beneficiary, Estate Planning Tip

Who Will Make Your Financial Decisions If You No Longer Can?

Posted by Dennis Sullivan & Associates on Mon, May 02, 2011

One of the most important, and often overlooked, aspects of estate planning is preparing for the possibility of your own incapacity – whether through illness or accident, and whether temporary or permanent. In the event that you are unable to make financial decisions – such as filing your taxes, selling property, or making investment decisions – have you given someone the legal authority to act on your behalf?

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You may have heard of a Durable Power of Attorney (DPOA), which is a legal document giving another person (the attorney-in-fact) the legal right to do certain things (powers) for another. A DPOA may be very broad, or very limited and specific. For example, you could designate someone to act on your behalf to make investment decisions and work with your IRAs, including taking distributions from them, converting them, and creating new IRAs from your current accounts. Forbes recently suggested the following hypothetical example:

A terminally-ill father has decided that his gift to his children upon his passing will be the total of his IRA, converted to Roth and with the taxes paid from his other sources, so that the Roth account will be available tax-free to the children.  The remaining balance of those other sources (a taxable investment account) is to be distributed to his alma mater per his will.  He has discussed this with his children and his attorney, however, prior to enacting this maneuver he slips into a coma, which lasts until his passing. Now his children will still have the benefit of the IRA, but they will be paying tax on each distribution from the account during their lifetime(s). And since his will stipulates that the taxable investment account’s balance is to be distributed to his alma mater, those funds are not available to pay the tax on the IRA distributions. This isn’t what the father had hoped would occur at all.

A properly drafted DPOA could have averted the problem by designating someone to act on the father’s behalf to complete the procedure. Note that Powers of Attorney terminate upon the death of the maker and may terminate when the maker (principal) becomes incapacitated. When the intent is to designate a back-up decision-maker in the vent of incapacity, then a Durable Power of Attorney should be used.

You can learn more about Powers of Attorney by attending one of our free Estate Planning & Asset Protection Workshops; you might also want to download our Unique 19-Point Trust, Estate & Asset Protection Legal Guide.

Tags: Estate Planning, durable power of attorney, power of attorney, roth conversions, IRA

When Can You Withdraw from Your IRA Early Without Tax Penalties?

Posted by Dennis Sullivan & Associates on Fri, Apr 29, 2011

There are a number of good reasons that you might be eying your IRA as it sits there with years to go before you turn age 59-1/2. You could see it as potential, as rescue capital, or if you’re in a really good place you could see it as the start of an early retirement. Of course, there are a few good reasons for leaving it alone – heavy tax hits and penalties – however, sometimes it's a good idea tofor withdrawing from your IRA early and penalty free.

The general wisdom is to leave your IRA alone until age 59-1/2 or else pay a 10 percent penalty on withdrawals. But there are allowances for penalty-free distribution in the case of serious financial hardship, higher educational expenses, or the cost of a first home. What is far less known is the 72(t) exception for Substantially Equal Periodic Payments (SEPP). Essentially, the IRS regulations allow annuitization of your IRA, so you can receive distributions straight from your IRA by taking them as a series of “substantially equal periodic payments.” The payments, once initiated, act much like required minimum distributions in that you must take out an amount determined by your life expectancy (or the joint life expectancy of you and your beneficiary) and at regular intervals, at least annually. Once initiated, you must take these distributions for 5 years or until age 59-1/2. You can then reorganize your distribution pattern or hold off entirely until the actual required minimum distributions set in at age 70-1/2.

The process, as you would imagine, is fairly complicated and that probably accounts for its relative under-use. To see it in action you can consult information from the IRS’s FAQ. It is tricky, and perhaps a little risky, but it is at least an interesting tactic to bring to light, and may be a practical solution to your early-retirement plans.

For more information on this and other retirement planning options, attend one of our free workshops or download our free guide on The 7 Biggest Concerns for Estate and Retirement Planning.


Tags: Retirement, annuity, IRS, IRA, retirement plans

Top Three Retirement Plans for Small Business

Posted by Dennis Sullivan & Associates on Wed, Apr 06, 2011

There are many different retirement plan options for small businesses (25 or fewer employees).  Before you decide which one would be best for your business, consider the following questions:

1. Can I afford a match for my employees?

2. Do I want to allow employees to contribute to the plan?

3. If so, will some want to save more than $11,500 a year?

4. Do I need flexibility to access the funds prior to retirement for emergencies?

5. How important are managing future taxes (a Roth option) versus my tax needs today?

Your answers to these questions will help you choose between the top three options: the 401(k), the SEP IRA, and the SIMPLE IRA.

The 401(k), which is probably the most well known, is also the most versatile because you can choose to match employee contributions or not and provide a vesting schedule. It’s also versatile for employees in that you can enable penalty-free access to the funds (by way of loans) and offer “catch-up” contribution opportunities to employees over age 50.  You could also elect for Roth 401(k)s that switch taxation to contribution rather than distribution, if you or your employees fear higher taxes in the future.

The SEP IRA, or “Simplified Employee Pensions” is the modern equivalent of a pension. It means that only the employer contributes to the fund, and must do so for all employees, rather than the employee contributing and the employer matching or not. The penalties are generally smaller, and it’s fairly easy to start, but this is because it is fairly stripped down in comparison to the 401(k) as there is no Roth, no catch-up contributing, no profit-sharing, and no loan option.

The SIMPLE IRA or the Savings Incentive Match PLan for Employees, offers the third option and is somewhat of a combination of the previous two. It is affordable, like the SEP IRA, but it operates by employer matching of employee contributions and offers catch-up options. Nonetheless, it is not quite as expansive as the 401(k), offering fewer options and having smaller contributions allowances. These of course, are just outlines.  Learn more by having your questions answered in person by attending one of our free Trust, Estate and Asset Protection Workshops.

Tags: Retirement, roth conversions, roth conversions, 401(k), Roth IRA, IRA, retirement plans

Consider the Future Taxrate on Your 401(k)

Posted by Dennis Sullivan & Associates on Fri, Apr 01, 2011

If you’ve been a diligent saver and keeping an eye on your 401(k) for all these years, it’s important to remember that the tax-man also has been looking on with interest and waiting for his cut. It’s simply too easy to forget, but a traditional IRA is tax-deferred until withdrawal, so that balance is deceiving. What is more, it means that the tax you will owe has yet to be decided. A recent MarketWatch article points out the strong possibility of higher tax rates for 401(k) savers once they reach retirement.

The value of delaying a tax hit into retirement, one of the principal benefits of a traditional IRA, has always been to avoid heftier taxes and secure what are expected to be lower tax rates whilst in retirement. Unfortunately, those expectations may not pan out for diligent savers with large IRAs. If your account is robust enough to keep you at or near your present income, then it’s also enough to keep you at or near your current tax bracket. If you are far from retirement then this may not be too distressing. After all, while you may be paying similar taxes upon withdrawal, your retirement investments are working for you with tax-free appreciation in the meantime.

Given the tax-rate outlook, savers should assess ways to diversify their tax situation in retirement. That means at least considering putting a portion of the amount you save for retirement into a Roth IRA – or a Roth 401(k) if one is offered by your employer.

“If you think taxes are going up, it makes sense to pay your taxes when rates are low, put the after tax amount into the Roth and take out your money tax-free when tax rates are high,” said Alicia Munnell, director of Boston college’s Center for Retirement Research and a professor at the school’s Carroll School of Management.

As summed up by Marcia Wagner of Wagner Law Group, “For the longest time, it seemed like almost a no-brainer that people, when they were in their income-earning stage, would be in a higher tax bracket … That may or may not be true in the future.”

For more on preserving your retirement savings, reserve your seat for an upcoming Trust, Estate and Asset Protection workshop, or check out the Planning with Retirement Accounts on our website.

Tags: Baby Boomers, 401(k), Roth IRA, Tax on IRAs, Tax Savings, IRS, IRA

Roth Conversion?

Posted by Dennis Sullivan & Associates on Wed, Mar 23, 2011

If you made a Roth IRA conversion last year (when all the media were encouraging you to do so), you may be sorry now that it's tax time.  The good thing is that it’s not too late to undo your conversion decision. You can still “re-characterize” the conversion and put the money back in your traditional IRA, as if nothing had ever happened.

But why re-characterize?  Suppose you converted $100,000 to a Roth IRA in 2010, and you are ready to pay the tax on your 2010 return (you elected out of the spread to 2011 and 2012). Except that now, your investment in the Roth IRA has dropped in value to only $50,000 – and you still owe tax on the conversion of $100,000! Now that is just totally wrong! Re-characterization offers a do-over of the conversion itself, and yes, erases it as far as the IRS is concerned. Re-characterization will move the funds back into the original traditional IRA, and the IRS only sees it as the movement of the original amount minus losses, rather than as a separate interaction.

If you suffered a net loss on those assets, re-characterization will not reverse your losses, but you can out from under the heavy tax liability. There are some tricks to re-characterization not covered here so consult the IRA Owner's Manual and also to learn more about how to protect and take control of your assets and life savings call (800) 964 – 4295 for a free workshop or visit our 

Tags: roth conversions, roth conversions, Roth IRA, IRS, IRA

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