Or you can call us at (800) 548-8138.
DEAR TRUST OFFICER:
I’ve made a nondeductible contribution to my IRA this year. Are there any special worries for this contribution?—CAREFUL SAVER
DEAR CAREFUL:
You’ve put after-tax dollars into this IRA, so you must take steps to be certain that you don’t pay income tax on these dollars again when you take distributions. The burden of proof for this is on the taxpayer.
The way to establish the tax basis of the IRA with nondeductible contributions is to file Form 8606 with your tax return for the year in which the contribution is made. This puts the data into the hands of the IRS. It’s the same Form that is used to alert the IRS to distributions from Roth IRAs, which are potentially tax free.
You must save copies of all of the Forms 8606 that you file during your working years. You should also keep copies of year-end account statements and contribution confirmation documents. You may want to keep a running total of your after-tax contributions. We suggest keeping both digital and physical copies of all this information.
You should share this information with your spouse and your financial advisors, and let them know where you keep your financial records.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
According to a 2024 research report from the Investment Company Institute, 62% of U.S. household have IRAs that have been funded with rollovers from employer plans. An estimated $595 billion worth of such rollovers occurred in 2020. Care needs to be taken that these transactions are handled properly, to avoid unexpected tax traps.
Once a taxpayer reaches age 73, he or she must take Require Minimum Distributions (RMDs) from tax advantaged retirement accounts. The first dollars being distributed from the account are considered to be RMDs.
Example. Taxpayer turns 73 this year, and plans to retire. In anticipation of this happy event, Taxpayer arranges to have his entire 401(k) balance rolled over into an IRA. He makes the smart choice of have a direct rollover to the IRA custodian, avoiding the need for withholding taxes on the transfer. However, Taxpayer inadvertently has now rolled his RMD into his IRA, which is an excess IRA contribution.
The better way. Taxpayer determines that his RMD will be $40,000 this year. He orders a distribution to himself of the entire amount of the RMD, then orders the rollover of the balance of the account. With this approach, there is no question of even a temporary excess IRA contribution.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
One of the fundamental duties in estate settlement is for the executor to carefully examine claims made against the estate, paying the valid ones and defending against the false ones.
Lisa Marie Presley, the only daughter of Elvis and Priscilla Presley, died January 12, 2023. She was the sole heir of Elvis Presley, so her fortune was substantial, much of it held in Lisa’s Irrevocable Trust.
Following her death, a claim was made that Lisa had borrowed $3.8 million from Naussany Investments and Private Lending LLC, using Graceland as collateral. A creditor’s claim was filed in California, a deed of trust was filed in Memphis, and a foreclosure notice on Graceland. Lisa’s oldest daughter (Elvis’ granddaughter), Riley Keough filed suit to stop the foreclosure sale.
A subsequent investigation determined that the supposed lender was not a real company. A key document had been notarized by a Florida notary, but who reported that she had never met Lisa Marie, had never notarized any document signed by Lisa Marie, and had no idea how her signature had been applied to the document.
Lisa Jeanine Findley of Missouri was arrested on August 16, 2024, for the fraudulent claims against Presley’s estate. According to the indictment, Findley had posed as three different people in furtherance of the scam, creating the false documents used to try to squeeze a settlement from the estate. On February 25, 2025, Findley pleaded guilty to two counts of mail fraud. A charge of aggravated identity theft was dropped. She will be sentenced on June 18.
The brazenness of this claim is unusual, but the executor of an estate must be prepared for any eventually. That’s why choosing the right executor is so important for family financial security.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
Elon Musk has reported that there are 20.8 million centenarians in the Social Security database who are not marked as deceased. This is not actually a new problem, according to an analysis by Justin Fox published by wealthmanagement.com. The Inspector General has been trying to make certain that dead people are not on the benefit rolls for more than a decade. Earlier audits have found a small number of inappropriate benefit payouts, but for the most part the millions of persons not marked as dead are not collecting benefits. Hence, the cost of updating the records is hard to justify when it won’t have a material effect on the benefits being paid.
However, Fox noted that there is a different cost to not updating records properly. The Social Security numbers of inactive accounts are available to enable identity theft. “Between 2006 and 2011, 66,920 of the Social Security numbers registered to people born in 1901 or earlier had wages, tips, and self-employment income associated with them — meaning that people born a lot more recently than that, and probably lacking in authorization to work in the US, had used them to get jobs. Between 2016 and 2020, 139,211 of the numbers registered to people born in 1920 or earlier did.” These folks reported $11.6 billion in taxable income, which implies that they paid roughly $1.4 billion in payroll taxes. That is a windfall for the Social Security Trust Funds, as those Social Security numbers will never trigger benefit payments.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
INVESTMENT PRODUCTS/SERVICES ARE:
NOT A DEPOSIT - NOT FDIC INSURED - NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
NOT GUARANTEED BY THE BANK - MAY LOSE VALUE
