Tax Time IRA Quiz

Tax Time IRA Quiz

True or False?

Q: The IRS can waive the IRA one-rollover-per year rule. 

A: FALSE. While the IRS may choose to waive the 60-day rollover requirement under certain circumstances for reasonable cause, the IRS cannot waive the one per year rollover limitation.

Q: An IRA could be subject to tax on unrelated business income (UBIT).

A: TRUE. For example, if you have self-directed IRA that invests in debt-financed real estate, a hedge fund arrangement, LLC, LP or other entity that doesn’t pay corporate tax, your IRA could be subject to UBIT.

Q: If I change my mind, I can recharacterize my Roth IRA conversion.

A: TRUE. FALSE. This rule changed effective December 31, 2017. You can no longer recharacterize your Roth IRA conversion.

Q: If I am still working, I can delay RMDs from my IRA until I retire.

A: FALSE. While some employer plans such as a 401(k) or 403(b) may offer this option, the still working exception does not apply to IRAs.

 

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