32 The QUEE NS Courier • october 30, 2014 for breaking news visit www.queenscourier.com ▶business The Elder Law Minute TM New Limits to IRA Rollovers By Ronald A. Fatoullah, Esq. and Yan Lian Kuang-Maoga, Esq. s Individuals can claim a deduction for contributions to their Individual Retirement Accounts (IRAs). And, assets in an IRA will grow tax deferred. However, assets distributed out of an IRA can be subject to income taxes and individuals must be very careful how distributions are structured. IRA owners may withdraw funds from their IRAs and avoid taxation if the assets are replaced within 60 days of the withdrawal. This is called an IRA rollover. It was commonly believed that this tax exempt rollover was allowed once per year for each IRA that an individual held. However, a new tax court decision, Bobrow v. Commissioner, limits a nontaxable rollover to only once per year per taxpayer. Individual Retirement Accounts (IRAs) are great vehicles for savings because the assets in the IRA have an opportunity to grow tax deferred. However, along with those tax breaks come restrictions on the distribution of the funds out of an IRA. To eliminate the so-called ‘abuse’ of unlimited rollovers, the law provided that rollovers could only take place once a year. It has been the common understanding of tax and financial professionals, and seemingly the IRS’ own interpretation of the law, that the yearly rollover limit applied separately to each IRA that a person may have. This interpretation of the rule has been used by taxpayers to extend the period of time they could use IRA funds by employing multiple IRA rollovers. In Bobrow v. Commissioner, notably involving the personal tax issues of a well-known tax attorney, the Tax Court ruled against the attorney and his interpretation that the 60 day rollover applies to each separate IRA. The Court clearly ruled that the 60 day rollover applies per taxpayer per year. The yearly limit applies to a 365 day period from the date of the IRA withdrawal, not a calendar year. Hence, a withdrawal in December of 2013 will preclude another withdrawal opportunity until December of 2014. The IRS has announced that it will comply with the decision of the Bobrow case and plans to issue proposed regulations to codify the ruling. However, no new regulations will take effect before January 1st, 2015. The Bobrow case will forever change our ability to use the funds in an IRA as a vehicle to receive temporary loans. It is important to note the difference between an IRA rollover and an IRA transfer. When you transfer an IRA, there are no tax consequences and you are not required to report anything on your income tax return. An individual is permitted to make as many transfers a year as he/she would like. A direct transfer of an IRA is made from one fund custodian to another. In other words, if an individual wants to change his/her IRA account from one institution to another, he/she can do so without limitation as long as the individual does not receive a check for the funds in his/her name. IRAs are a good way to save for retirement, but they only a part of a good overall legal and financial plan. Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that exclusively concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. The firm has offices in Forest Hills, Great Neck, Manhattan, Brooklyn, and Cedarhurst, NY. This article was written with the assistance of Yan Lian Kuang-Maoga, an elder law attorney with the firm. Ronald Fatoullah & Associates can be reached by calling (718) 261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also a financial advisor and is cofounder of JR Wealth Advisors LLC. elder law ROnald Fatoullah ESQ, CELA* Sacred Heart Celebrates 90 Years of Excellence The prestigious Catholic school marks nearly a century of quality education in Bayside. A mainstay in the Bayside community since 1924, Sacred Heart Elementary School has been dedicated to the spiritual, academic, and emotional development of each student since it first opened its doors. Now, 90 years later, with a reputation as one of the leading Catholic schools in Queens, Sacred Heart is marking the anniversary by continuing the tradition of blending Catholic values with modern society and expanding upon its programs to ensure that students are able to supplement their academics with enriching experiences outside of the classroom walls. According to principal Dennis Farrell, what sets Sacred Heart apart from other academic institutions is the blending of a rigorous academic curriculum with a family-oriented environment that provides students with the encouragement and support they need to succeed. Faculty and staff members at Sacred Heart are skilled in teaching to the individual needs of each child, meaning that the more advanced students will be challenged with more difficult tasks and assignments, whereas students with learning difficulties will be given the one-on-one attention and the extra time that they require. Abstract learning skills like critical thinking, inference, and problem solving, are given equal weight in the curriculum to ensure that each student reaches his or her full potential. An accredited Middle States Association school, Sacred Heart strives to create an atmosphere of commitment, where students learn to value traditional disciplines while keeping up with and becoming proficient in new technology. In addition to Regents-level courses in Algebra and Earth Science, every Sacred Heart student learns to use laptops provided in the computer labs, SMART boards that classrooms are equipped with, and a search database that puts the extensive library at their fingertips. In addition to the sciences and technology, students will become well-rounded in art, band, music appreciation, physical education, and a “Young Authors” writing program. The knowledge of foreign language begins early for Sacred Heart students, as Spanish is taught beginning in Kindergarten, then becomes a part of the core curriculum in seventh and eighth grades. To learn more about Sacred Heart’s students, faculty, staff, and academic curriculum, visit www.sacredheartbayside. silverstreakhost.com. The website features a regularly updated feed of upcoming activities and special events at the school, plus an outline of admission and registration requirements. For further questions or additional details, call the school’s main office at 718-631-4804. Sacred Heart Elementary School 216-01 38th Avenue Bayside, NY 11361 718-631-4804 www.sacredheartbayside.com THE COURIER/Photo by Asha Mahadevan
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