Capital Gains Harvesting InfoGraphic From Bob Keebler
Friday, September 07, 2012 15:44

The 2012 Capital Gains Harvesting infographic from Bob Keebler is a free resource for A4A members. Please download it

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3.8% Medicare Surtax Will Add Selling Pressure In The Stock Market And Make Life Insurance And Annuities More Popular, Says Keebler
Sunday, August 05, 2012 20:26

Tags: medicare surtax | tax law

The 3.8% surtax is likely to add selling pressure in the stock market in the near-term and make life insurance and annuities more popular for the long-term. Those were just two of the emerging trends that will be reshaping the wealth management landscape for high-net-worth individuals in the months ahead, according to comments at a webinar last Friday by tax expert Robert Keebler.


Attendance was strong at the webinar, indicating that advisors know that the new surtax part of the health care law that the U.S. Supreme Court upheld on June 29 is going to play an important role in wealth management in the months ahead. However, Keebler’s assessment included some surprising twists, including a prediction that life permanent life insurance and annuities will return to popularity to shield income. 


Keebler also said that avoiding paying the surtax on investment income could cause investors to sell assets with big gains. With the stock market rising 100% since its low during the global financial crisis, that could add selling pressure in the stock market.


To view replay, get CFP and IMCA CE credit, and get the slides to Keebler's presentation, subscribe to Keebler’s monthly presentations for a year for $300. (You can customize the slides to your brand and use them in newsletters, blogs, and client meetings.)


Keebler received an amazing  4.67 score from attendees (on a five-point scale) and their comments are below.





  • Good information
  • Very helpful. Great topic. One of the best ones I've seen lately
  • Very helpful and timely, great examples
  • Should provide slides
  • Helpful but a lot of information; would like to have the slides.
  • Very well done. Made a confusing topic much more understandable.
  • Numerous sound problems!
  • Outstanding!
  • Great content
  • Good detailed information
  • Excellent
  • Interesting insight on a new planning subject.
  • Always excellent
  • Very valuable...wish there had been more time!
  • Dry topic, good presentation though.
  • Good information on a very timely topic.
  • As usual, Bob Keebler has added a better (detailed) understanding of a very complex tax topic that will (unfortunately) be a part of most of our clients' future financial reality. His ideas on how to help mitigate this surtax has already got me thinking in new directions to now approach with my clients. VERY GOOD STUFF!
  • I really enjoyed it, thought it was very informative
  • Excellent discussion of the mechanics of the tax and strategies for dealing with it.
  • A little hard to follow.
  • Great topic, info.
  • Overall very good
  • Good stuff
  • I need to watch it in your archive about three more times to understand it.
  • It was very well done, congratulations on collaborating with Bob, A REAL PROFESSIONAL.
  • Fabulous job once again Bob! Thank you to you and Andy.
  • I would have liked it to be longer for more Q and A.
  • Very good. Thanks for the timely subject
  • Great to see the examples.  They clarify the confusing part of the requirements.
  • Good, nice use of examples, got kind of rushed at the end.
  • Pretty good.
  • Good info on a new delightful subject!
  • Excellent and very timely.
  • Actionable content
  • Excellent!
  • GREAT information and sale ideas
  • Great information that is critical to be aware of.
  • Excellent!
  • Tough topic - presented very well
  • Chock full of information.
  • Good info, but went way too fast.  Too many details glossed over
  • Very timely and informative
  • Robert is fantastic!
  • Excellent examples
  • Good information, but should provide slides. Felt like an exam review much of the time, but concept was solid
  • Very helpful in understanding the surtaxes.  Do you know of anyone that has created a calculator to assess if the surtax is applicable and subsequently the extra tax that will have to be paid due to the surtax?
  • Informative
  • Information overload.  Perhaps you break this one into two segments
  • Great
  • Great information, a little too fast in the pace.
  • Thanks Andy!
  • Very good and timely
  • It was very informative and helpful
  • Outstanding; very helpful
  • I thought it was excellent
  • Good stuff




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Reminder: 60-Day Rollover Not Available To Inherited IRAs
Friday, July 27, 2012 13:51
A recent summary decision by the U.S. Tax Court serves as a reminder that inherited IRAs are not allowed the 60-day rollover period. Instead, once funds have left an inherited IRA, they cannot be placed back in, and they become subject to ordinary income tax.

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In Beech v. Commissioner (T.C. Summary Opinion 2012-74), Mrs. Beech inherited a Citi Smith Barney IRA from her mother in 2008. Citi Smith Barney subsequently made death benefit distributions to Mrs. Beech.  At the time, Mrs. Beech established an inherited traditional IRA with American Funds and deposited the death benefit distribution into the inherited traditional IRA. Such death benefit distribution amount was not reported as taxable income on Mr. and Mrs. Beech’s tax return. The IRS issued Mr. and Mrs. Beech a notice of deficiency indicating that all of the retirement income Mr. and Mrs. Beech reported on their 2008 return was taxable income.
While IRC Section 408 provides that a distribution is not includible in gross income if the entire amount of the distribution is paid into an IRA for the benefit of that individual within 60 days of the distribution, such provision is not applicable to inherited IRAs. According, the Court ruled against the Beeches and the death benefit distribution was taxable income for 2008.
This is an issue that we unfortunately see all too often. Taxpayers request or are sent a distribution check from an inherited IRA, not knowing that such amounts cannot be placed back into an inherited IRA. Once the funds have left the IRA wrapper, they are taxable. A taxpayer is not treated as having received a taxable distribution from an IRA, however, if funds in the IRA are transferred from one account trustee directly. As highlighted in the Beech case, handling an inherited IRA incorrectly can lead to immediate taxation of the entire IRA, while a prudent decision can result in a significantly larger tax deferral for the beneficiaries. Accordingly, funds from an inherited IRA should only be moved via trustee-to-trustee transfers.


With the exception of an inherited IRA that is being rolled over by a surviving spouse as a spousal rollover. 

IRS: Self Employed Can Deduct Medicare Premiums
Wednesday, July 18, 2012 10:59

Tags: medical insurance | Taxes

The IRS says Medicare premiums may be deducted under IRC Section 162(l) for coverage of the self-employed individual’s spouse, dependent or a child (as defined in section 152(f)(1) who as of the end of the taxable year has not attained age 27). In Chief Counsel Advise (CCA) Memorandum 201228037, issued on July 13, 2012, the IRS says self-employed individuals who failed to deduct Medicare premiums for prior years may file an amended return to claim the deduction.

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Section 162(l) allows sole proprietors to take a deduction in computing adjusted gross income. The definition of a self-employed individual for these purposes also includes a partner or S corporation employee who is a more-than-2% shareholder on whose behalf the partnership or S corporation pays the premium. In addition, a partner or S corporation employee-shareholder may pay the premium and be reimbursed by the partnership or S corporation. In both cases, the amount is to reported in the partner’s or employee-shareholder’s gross income. The health insurance deduction is for amounts paid during the taxable year for insurance that constitutes medical care for the taxpayer, his or her spouse, dependents, or a qualifying child.
Previously, IRS guidance indicated that such premiums were not deductible. In FSA 3042, the IRS stated that, because Medicare Part B is a federal program available only to those who qualify under the statute, it cannot qualify as a health insurance plan established by a taxpayer under a trade or business, a requirement for deductibility under IRC Sec. 162(I).
Prior IRS form instructions followed the position taken in FSA 3042. The 2009 Form 1040 IRS instructions stated that “Medicare premiums cannot be used to figure the [self-employed health insurance] deduction” (see page 31). Likewise, 2009 Publication 535 stated that “Medicare Part B premiums are not considered medical insurance premiums for purposes of the self-employed health insurance deduction” (see page 18).
In 2010 and 2011, however, the instructions for Form 1040 stated that Medicare premiums can be used to figure the self-employed health insurance] deduction (see page 29 of 2010 instructions and page 28 of 2011 instructions). The instructions for Publication 535 were also modified accordingly (see page 18 of 2010 and 2011 publications). Until CCA 201228037, however, the IRS did not issue any guidance signifying their change in position from FSA 3042.
Nine Key Tax Rules That Will Affect Advisor Clients Now That The Supreme Court Upheld The Affordable Health Care Act
Thursday, June 28, 2012 13:18

Tags: estate planning | health care | Taxes

How will the Supreme Court decision upholding the health care bill affect your clients? Here are the nine key tax rules that financial advisors need to know about.

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1. Beginning in January 2013, an additional Medicare tax payroll tax of 0.9% will be applied to individuals with adjusted gross income (AGI) exceeding $200,000 and married couples filing jointly with more than $250,000 of AGI.


2. Beginning in January 2013, a 3.8% “surtax” will be levied on single taxpayers with AGI exceeding $200,000, and married couples filing jointly with AGI exceeding $250,000. The surtax applies to the lesser of net investment income or AGI exceeding $200,000 for individuals ($250,000 for married couples filing jointly).


3. The penalty on those who do not have health insurance is scheduled to take effect January 1, 2014. The annual penalty will be $95 or 1% of income, whichever is greater. It rises to $695 or 2.5% of income for individuals by 2016. Families face a maximum penalty of $2,085, but still will owe 2.5% of household income if that amount is greater.


4. In 2012, all W-2s will have to include the value of health care benefits provided to employees.


5. Effective in 2011, the penalty on non-qualified distributions from Health Savings Accounts is doubled to 20%.


6. In 2013, the itemized deduction floor for medical expenses increases to 10% of AGI.


7. Beginning in 2018, the “Cadillac Tax” will become effective — a 40% excise tax on the portion of high-cost health insurance plans that exceed $10,200 for individuals or $27,500 for families.


8. Beginning in 2014, a refundable tax credit will be available to help individuals with low income purchase health insurance coverage.


9. Beginning in 2014, a non-deductible fee of $2,000 per employee will be imposed on businesses that do not provide adequate coverage. The first 50 employees are not counted.


For a detailed discussion of the tax rules affecting clients in the Affordable Health Care Act, please join us for a free webinar on Friday, July 6 at 4 ET, when I will discuss:

  • Medicare payroll tax of 0.9% on joint filers with more than $250,000 of AGI
  • 3.8% surtax on joint filers with more than $250,000 of AGI
  • New reporting requirements on W-2s
  • Doubling of the penalty on non-qualified distributions from Health Savings Accounts 
  • 40% excise tax on high-cost health insurance plans

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