Pension portability has been tremendously increased by the Economic Growth and Tax Relief Act of 2001 and the Pension Protection Act of 2006. With a few limitations, funds can be transferred from employer retiirement accounts to a Roth or IRA account and, in some case, from a Roth or IRA account to an employer retirement account.
Tax tips and developments relating to individuals
Certain transactions aren't permitted for Roths and IRAs. They are called "prohibited transactions", and can be subject to penalties. In this post, I'm going to focus on prohibited transactions. I am only going to hit some highlights so you will be aware of some red flags.
It's easier to say what can't be held than what can be held in a Roth or IRA. You can't hold collectibles or life insurance contracts in a Roth or IRA. Roths and IRAs aren't permitted shareholders of S corporations, except for bank stock held on October 22, 2004, so S corporation stock generally is not a permitted investment for a Roth or IRA.
Many people aren’t aware that “tax exempt” entities, including charities and retirement plans, are subject to income taxes on certain types of income, called “unrelated business income.” How to apply the tax rules for unrelated business income is one of the more complex sections of the income tax laws.
Stock acquired using a stock option can't be contributed to an IRA or Roth. According to Internal Revenue Code Section 219(e)(1), contributions, except for rollover contributions, must be in cash.
On this week's Financial Insider Weekly interview scheduled to be broadcast in San Jose and Campbell, College finacing expert David Beck CFP(R) discuses using tax benefits and student loans to finance a college education.
Same sex married couples have different income tax filing status in California and other states. Michael Gray interviews Professor Patricia Cain of Santa Clara University for the details.