SECURE act

[kathyc2]

There was some discussion of this here a couple months ago. According to Barrons, it looks like it will pass. More "simplification".

https://www.barrons.com/articles/the...of2&yptr=yahoo

[kathyc2]

Requirement for non-spouse heirs to deplete Roth account over 10 years rather than lifetime tables, certainly screws up long term plans. Idiots!

[AZUKHiker]

Plus don't forget all the other extenders that have passed in the Appropriations Bill. 2018 amended returns here we come. :-)

[kathyc2]

Ugg. With all this crap the last couple years I'm soooo looking forward to retirement. At least it looks like I'll get a little break for the furnace and AC I had installed.

[ATSMAN]

Ugg. With all this crap the last couple years I'm soooo looking forward to retirement. At least it looks like I'll get a little break for the furnace and AC I had installed.

Are you talking about Residential Energy Credit?? I did not see that in that bill. Did I miss that completely? That would be good if it is in there.

[kathyc2]

Are you talking about Residential Energy Credit?? I did not see that in that bill. Did I miss that completely? That would be good if it is in there.

SEC. 123. NONBUSINESS ENERGY PROPERTY. (a) IN GENERAL.—Section 25C(g)(2) is amended by striking ‘‘December 31, 2017’’ and inserting ‘‘December 31, 2020’’.

https://amendments-rules.house.gov/a...0022572257.pdf

[RWG1950]

This SECURE act is going to have big effect on many people. The elimination of the stretch IRA for non-spouse beneficiaries struck me as being among the most significant. Some people with large IRA's have set up IRA trusts in their estate plan that will now apparently be negated under the new 10 year distribution rule. Uncle Sam needs the tax bucks though & a 10 year deferral for benes may not be all that bad.

[Rapid Robert]

Some people with large IRA's have set up IRA trusts in their estate plan that will now apparently be negated under the new 10 year distribution rule.

One reason for doing this is to prevent a young and immature beneficiary from squandering a windfall inherited IRA distribution. So now even if a child, say age 10, is a beneficiary of trust which in turn is the beneficiary of the decedent's IRA, they will get the entire amount no later than age 20? Or will it mean the IRA distribution can remain in the trust until the beneficiary gets older (per terms of the trust), but at the cost of the trust paying all the tax at trust rates?

[ATSMAN]

SEC. 123. NONBUSINESS ENERGY PROPERTY. (a) IN GENERAL.—Section 25C(g)(2) is amended by striking ‘‘December 31, 2017’’ and inserting ‘‘December 31, 2020’’.

https://amendments-rules.house.gov/a...0022572257.pdf

Thanks for pointing the date. Now I have to go through my notes from last tax season to see which clients could have claimed the credit. I am assuming IRS will require a 1040X unless it is a one page form that we can submit to claim the credit. What a pain!

[kathyc2]

Thanks for pointing the date. Now I have to go through my notes from last tax season to see which clients could have claimed the credit. I am assuming IRS will require a 1040X unless it is a one page form that we can submit to claim the credit. What a pain!

I'm not seeing it in any of the articles, so maybe I read it wrong? Or, it didn't make the final bill?

[kathyc2]

One reason for doing this is to prevent a young and immature beneficiary from squandering a windfall inherited IRA distribution. So now even if a child, say age 10, is a beneficiary of trust which in turn is the beneficiary of the decedent's IRA, they will get the entire amount no later than age 20? Or will it mean the IRA distribution can remain in the trust until the beneficiary gets older (per terms of the trust), but at the cost of the trust paying all the tax at trust rates?

"Distributions over the life or life expectancy of a non-spouse beneficiary are allowed if the beneficiary is a minor, disabled, chronically ill or not more than 10 years younger than the deceased IRA owner. For minors, the exception only applies until the child reaches the age of majority. At that point, the 10-year rule kicks in."

https://www.kiplinger.com/slideshow/retirement/T047-S001-how-the-secure-act-will-impact-retirement-savings/index.html

[New York Enrolled Agent]

I'm not seeing it in any of the articles, so maybe I read it wrong? Or, it didn't make the final bill?

It’s still there. I think most article writers only look at Subtitle A of Title 1 of Division Q where the word extension is used for PMI, T&F, Qualified Motgage Cancellation and 7.5% medical and the extender provisions are located.

The section 25(C) energy extension is in Subtitle C of Title 1 - perhaps out of sight.

[kathyc2]

New York Enrolled Agent: You are the best one here at reading actual code. I'm reading that the QCD still starts at 70.5 instead of 72. Do you agree?

[New York Enrolled Agent]

Yes - I would agree. §408(d)(8)(B) seems unchanged.

It does look like though the QCD will be reduced by contributions to IRAs after age 70½. I need to look at it more.

[rbynaker]

Hey folks!

For reference, here's the law:

https://www.congress.gov/116/bills/h...6hr1865enr.pdf

From a tax perspective, we have our old familiar extenders, extended retroactively back to 2018. Some of my favorites:

Various energy credits
PMI deduction
Tuition & Fees deduction
COD exclusion on personal residence
Medical floor back to 7.5%

The good news, they actually extended all of these into the future thru 12/31/20. So we can splurge on that better hot water heater this coming year and feel confident that we're getting a tax credit. The bad news (at least from my tax prep perspective), they also made them retroactive. We'll see how long it takes for the IRS to get the forms updated/released for 2018 and 2019. Anyone want to volunteer to go through old threads for the past year where people asked about all these and were told they expired? Gotta love it when Congress retroactively makes liars out of everyone!

Kathy & NYEA,

My read on QCDs is that it's still 70 1/2 with the caveat that there's now a clawback if you take a QCD AND make a contribution to your IRA after 70 1/2. I struggled with trying to make sense of that section and it'll be interesting to see how/if the IRS tracks this stuff (new form?) Seems like you need to keep a tally of lifetime post 70 1/2 IRA contributions vs. lifetime QCDs. Looks like a mess! (See top of page 616 in link above). I'm not opposed to a new form, I've been wanting some sort of reporting mechanism for QCDs for a while now.

Are we having fun yet?

Rick