Big Roths: How to Build One and What to Do With It– April 27, 2021

Posted by Guest Blogger Leon LaBrecque, Sequoia Financial Group, LLC

A Roth IRA is a magnificent planning tool that offers some huge opportunities:

  • Growth and income can be tax-free
  • There are no Required Minimum Distributions for the owner, a spouse beneficiary and a 10-year distribution window for most non-spouse beneficiaries
  • Basis on assets from a Roth are automatically stepped-up. Roth assets are tax-free and are distributed at their market value. With a possible change in basis rules for inherited assets to a ‘carryover basis,’ this is a significant advantage. For example, if you held Widget.com stock in your Roth that you bought at $10 a share and it was worth $100 a share, you’d receive it on distribution with a $100 basis. If carryover basis were enacted and Widget.com was in a taxable investment account rather than a Roth IRA, your heirs would inherit it at $10 a share and pay capital gains taxes (either when they sold, or possibly earlier).

The purpose of this piece is to discuss how to build, invest and distribute a big Roth IRA.

>> Read the full article on Forbes.com.

Leon C. LaBrecque, JD, CPA, CFP, CFA, is the Chief Growth Officer of Sequoia Financial Group, LLC. Contact him at llabrecque@sequoia-financial.com to discuss this topic further or visit www.sequoia-financial.com.


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