Vol. 2   Issue 2 - February 2010  -  www.cannonfinancial.com

Planning Ideas - Maximizing the Benefits of a Stretch IRA

   With the Stretch IRA, an IRA owner designates a younger-generation family member as the IRA beneficiary. The beneficiary can then elect to receive the required minimum distributions (RMD) based on his or her longer life expectancy, thereby extending the opportunity for tax deferral. Overall, there should be enhanced benefits for the IRA beneficiary and, potentially, for downstream heirs.

    That’s the textbook plan. But, of course, in real life things are usually more complicated. What if the IRA owner wishes to benefit multiple beneficiaries? Read More.

Practice Management - Don’t Let Time Pass You By

   A well-executed Communication Plan assures regular and meaningful contact with your clients. You can use those contacts to keep clients abreast of tax, regulatory, and market trends that affect their wealth management plans. Those contacts also allow you to gain insights into your clients’ current situations, futures, feelings, and family dynamics so you can provide ideas, suggestions, and alternatives where appropriate. Read More.

Regulation & Compliance - From Main Street to Wall Street: Transactions Tax, Fiduciary Standards, and Restraints on Risk-Taking

   Efforts to respond to public anger at Wall Street and reign in behaviors that some have blamed for the recent financial crisis continue on Capitol Hill. Three proposals advisors should be alert to concern:

• A recently proposed transactions tax;
• An imposition of fiduciary standards on broker-dealers; and
• The Obama administration’s call for more restraint on risk-taking by investment banks and hedge funds. Read More.

Taxes - Estate Tax Repeal and Carryover Basis in 2010: Some Further Considerations

   By now, we know that Congress didn’t get around to addressing transfer taxes in 2009. Consequently, as unlikely as it seems, the estate and generation-skipping transfer (GST) taxes have been repealed for 2010. Unless Congress acts this year, the 2001 estate and GST tax regimes will return. In 2001, the estate and GST exemptions were a mere $1 million and the maximum rates were 55 percent.

    In addition to the repeal of the Federal estate and GST taxes, 2010 marks the onset of a “modified carry-over basis” regime. Under the law as it stands today, for decedents dying in 2010, appreciated assets do not receive a step-up in basis to date of death value. Instead the beneficiary takes the decedent’s adjusted basis in such assets.
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