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 firstname.lastname@example.org to discuss this topic further or visit www.sequoia-financial.com.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.