Here is the link to our May newsletter.  If you would like to subscribe, please send your email address to dustin@sunwesttrust.com.  Thank you.

Sunwest Trust May 2012 Newsletter

When you inherit an IRA from someone you will have to choose how you would like to take it. There are several options when this happens, so I thought I would take a few minutes to explain them. If you are a non-spouse beneficiary, you have the following three options:

• Lump sum distribution
• Distribution over 5 years
• Lifetime distribution (if you choose this option, your age will be plugged into the life expectancy table each year to determine the amount of your distribution)

If you are a spouse beneficiary, you have the above options and you will also have the option to treat the IRA as your own. In this scenario, you will take over the IRA in your own name and you will be able to contribute to the IRA, take distributions and invest, just as if it were your own IRA.

If you have questions, please speak with your CPA or tax professional.

 

Here's another good article that I came across that discusses Inherited IRAs:

Non-Spouse Inherited IRAs: How to Avoid Making Common Mistakes

I've received a few calls and emails from Individual 401(k) clients with questions about the 5500 EZ form.  This form is the annual reporting form for Individual/Solo 401(k)s.  This form is not required until you accumulate $250,000.00 in your plan.  If you are under the $250k limit, there is no annual reporting required for your Individual 401(k). 

The 5500 EZ form can be found on the IRS website and is very simple to fill out.  If you have questions about it, as always we urge you to speak with a CPA or tax professional.

Here's a good article that I came across that has a little bit more information about the 5500 EZ form.

Form 5500-EZ for your Solo 401k

 

 

 

Our local news did a segment alleging that many land owners were taking advantage of people through the use of Real Estate Contracts.  The segment was completely biased and unfair.  The truth is that if these individuals had gone through the correct process they could have avoided these unfair situations entirely. 

When you buy or sell using a Real Estate Contract you should always use a realtor and close through a title company.  The title company will make sure that there are no liens on the property and find out if the person selling the property is actually the owner.  Next, I would always recommend using an escrow agent.  The fees to the escrow agent are very minimal and they make sure that both parties are abiding by the terms of the contract.

In the news segment, the buyers did not close through a title company, they did not use an escrow agent and they even admitted that they didn't understand the contracts that they were signing. 

KOB.com News Article About Real Estate Contracts

As you may know, Sunwest Trust sends out quarterly statements in the mail. Some clients have requested that we just email them the statement instead of sending a physical statement through the mail. We have considered this request and have decided to allow clients to make the choice of whether they would like to have paper statements or email statements. They will look the exact same and contain the same information, so that should not have any impact on your decision.

If you would like to discontinue receiving paper statements through the mail and begin receiving your quarterly statement via email, please contact our customer service department at 1-800-642-7167.

Here's a great article that I came across.  It's by our good friends at IRA Financial Group and talks about the certain statutory exemptions for your IRA from creditors and bankruptcy.

Statutory Exemptions Article

 

If you are covered by another employer plan such as a 401(k) or 403(b) and your income limit is too high, it may prevent you from making tax-deductible contributions to a Traditional IRA.  However, this does not limit you from making non-deductible contributions to a Traditional IRA.  You would still have to pay taxes on the money before you put it in, but the earnings on those contributions are tax deferred until you take them out at retirement age.

If you do make non-deductible contributions to your Traditional IRA, you are responsible for filing a form 8606.  Your IRA custodian does not file this form and is not responsible for informing you about the form.  If you fail to file form 8606 for non-deductible contributions, you may be taxed on them again when you take them out as distributions.

If you have questions about non-deductible contributions to a Traditional IRA or questions about the form 8606, please speak with a tax professional.

Making a contribution to your IRA is easy. Simply send us a check along with your contribution form, which you can access through this article or you can get by going to the forms page on the left side of the screen.

Keep in mind that if you have a Roth or Traditional IRA, you may only contribute up to $5,000 per year to your account. If you are over the age of 50, you may contribute an additional $1,000 per year for a total of $6,000. If you would like to wire your contribution, please fax or email your contribution form ahead of time and call our office for wiring instructions.

If you have any questions about contributions or contribution limits, please speak to a CPA or tax professional.

 

 

http://www.sunwesttrust.com/self-directed-iras/forms

Video explaining how to fill out the form:

 

 

http://www.sunwesttrust.com/self-directed-iras/forms/96-contribution-video