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AWSCPA TECHCASTS PROVIDE CPE
Have you tried them on for size?

The American Woman’s Society of CPA’s is continuing its series of TechCasts that began in 2006 and will continue throughout 2008.  The TechCast process is very easy to use.  Members can register on line, pay with a credit card (invoicing is available to members), and will receive an email confirmation. 

The service is reasonably priced and the system allows multiple people from a site to be trained for one-low price.  No travel and a minimal time commitment are the results.

Regular fees are $35 per log-in site for members and $55 for non-members.  It is an additional $10 for each additional CPE certificate (the first is included with the $35 fee). These fees include the Internet portal, audio-conferencing and long-distance charges, presentation handouts, one hour of CPE, and access to the profession’s top instructors and consultants in a live, interactive 60-minute conference.

Following are the dates and topics for upcoming TechCasts with more added all the time.

• April 17, 2008 – “Financial Crimes-Tracking the Global Criminal and Locating Hidden Assets” by Ronald F. Worst, Criminologist-Financial Fraud

Note that high-speed Internet access is not mandatory – the system works with dial up, but you must have separate connections for the audio and video portions.

If there is a session that you would like repeated, let us know, and if there is enough demand, we will do our best to arrange it.  If there are topics you would like to see included, let us know.  Note that PODcasts are available for many of the completed sessions.

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GETTING TO THE BOTTOM OF INHERITED IRAS
An article from Corporate Financial Services Partner - MassMutual

Naming a beneficiary for your traditional Individual Retirement Account (IRA) need not be a difficult task. Most people choose their spouse, if married, or another loved one. However, the rules governing the distribution of IRA assets to beneficiaries are not so simple. With this in mind, here is a quick look at the Internal Revenue Service (IRS) rules for inherited IRAs.

Taking a Closer Look

The IRS stipulates that an IRA owner must begin taking required minimum distributions (RMDs) by April 1 of the year following the calendar year during which he or she reaches age 70½, commonly referred to as the “required beginning date.” Prior to age 70½, you don’t have to take any money out of your IRA. But once you reach that magical 70½, the government wants you to start taking withdrawals. IRA beneficiary rules involve two separate issues: 1) the age of the IRA owner at the time of death; and 2) the identity of the IRA beneficiary (the rules for spousal beneficiaries differ from those for non-spousal beneficiaries).

Spousal Beneficiaries

If an IRA owner dies before RMDs have begun, a spousal beneficiary can choose to withdraw all IRA assets within five years, maintain the IRA under the deceased spouse’s name (and keep in mind, withdrawals are income taxable) or treat the IRA as his or her own. Suppose Jim Bradshaw (a hypothetical case) dies and his wife, Linda, is the beneficiary of his IRA. If Linda maintains the IRA in Jim’s name, minimum distributions do not have to begin until December 31 of the later of: 1) the year following the year of Jim’s death; or 2) the year in which Jim would have reached age 70½. However, distributions would be based on Linda’s life expectancy. If Linda chooses to treat the IRA as her own, she is entitled to name new beneficiaries, and the rules governing RMDs would be the same as if the IRA were originally her own. Therefore, distributions would have to begin by April 1 of the year after the year in which she turns 70½, and the required amount would be based on her life expectancy.

If Jim were to die after RMDs had begun, the options for Linda would be different. She could choose to continue receiving distributions based on either Jim’s life expectancy or her own life expectancy. As a third option, Linda could opt to roll over Jim’s assets into her own IRA. (This option is not available for IRAs that have been annuitized.)

Non-Spousal Beneficiaries

Non-spousal beneficiaries have fewer options than spouses. Unlike spousal beneficiaries, non-spousal beneficiaries may not treat IRAs as their own and cannot name additional beneficiaries. If the owner dies before the required beginning date, all assets in the account must be distributed by the end of the fifth anniversary year of the owner’s death. Alternately, the beneficiary may elect to receive distributions over his or her life expectancy. The amount of distributions is based on the beneficiary’s life expectancy, and they must begin by December 31 of the calendar year immediately following the calendar year of the owner’s death. This is sometimes referred to as a stretch IRA because the payments are stretched out over the beneficiary’s life expectancy.

If the owner dies on or after the required beginning date, the assets must be distributed over a period not exceeding the larger of the owner’s or the beneficiary’s life expectancy.

Parting Thoughts

Under regulations finalized in 2002, a primary beneficiary can disclaim an inheritance (including IRA payments), allowing it to pass to a contingent beneficiary. In response to the increased longevity of the American population, the IRS has increased life expectancy figures, which essentially reduces required distributions because they are paid out over a longer period of time.

If you are an IRA owner or beneficiary, the wide variety of beneficiary arrangements can easily lead to confusion. It is important to be aware of your options and the tax consequences that may apply in your situation.

Copyright Ó 2006 Liberty Publishing, Inc. All Rights Reserved.