Former Reagan Budget Director Despairs: ‘I Wouldn’t Touch the Stock Market With a 100-Foot Pole’
60 Minutes : The 401(k) Recession
CFO was an Early Adopter of PC Videoconference Technology to Support of Clients & Advisors
CFO Perspective — 401(k) In-Plan Roth Conversions
401(k) In-Plan Roth Conversions. You may have heard the buzz … 401(k) plans can now permit in-plan Roth conversions. But is this an option for you?
What is it? A 401(k) in-plan Roth conversion (also called an “in-plan Roth rollover”) allows you to transfer the non-Roth portion of your 401(k) account into a designated Roth account within the same plan. The amount you convert is subject to federal income tax in the year of the conversion (except for any nontaxable basis you have in the amount transferred), but qualified distributions from the Roth account in the future are entirely income tax free. The 10% early distribution penalty doesn’t apply to amounts you convert (but that tax may be reclaimed by the IRS if you take a nonqualified distribution from your Roth account within five years of the conversion).
CFO Perspective — Rising Interest Rates: The Downside of Economic Recovery
Rising Interest Rates: The Downside of Economic Recovery. Over the last several years, investors have grown accustomed to historically low interest rates. Ever since the Federal Reserve Board’s target fed funds rate–the rate at which banks lend to one another–hit a high above 19% in mid-1981, the long-term direction of rates has been downward. In the last decade, the Fed’s data* shows the target rate has never been much higher than 6%. And since December 2008, the Fed has kept it at a previously unheard-of level between 0.25% and zero to try to ensure that credit would be available to promote economic recovery.
CFO Perspective — A/B and A/B/C Trusts
A/B and A/B/C Trusts. If you’re married, a combination of trusts, often referred to as A/B, A/B/C, or A/B/Q trusts, may be useful for estate planning purposes. The combination of trusts can sometimes be used to minimize total estate tax for two spouses, and can provide nontax benefits as well.
A federal estate tax overview.
- An unlimited marital deduction is generally available for transfers of wealth between you and your spouse.
- Currently, an estate of $5 million can be sheltered by a $5 million basic exclusion amount and a tax rate of 35% applies to any excess. Any unused portion of the basic exclusion of a deceased spouse is portable and can be transferred to a surviving spouse. The $5 million amount will be indexed for inflation in 2012.
- Absent further legislation, in 2013, the amount that can be sheltered is reduced to $1 million, the top estate tax rate increases to 55%, and the basic exclusion amount is no longer portable.
CFO Market Week — March 28, 2011
MARKET WEEK: MARCH 28, 2011 The Markets. Investors brushed aside disappointing housing data and debt concerns in Europe to push domestic equities higher for the week. The Dow and S&P 500 regained 12,000 and 1,300 respectively and both small caps and the tech-heavy Nasdaq saw new enthusiasm. That renewed interest in stocks helped send the price of 10-year Treasuries back down as yields rose.
CFO Client Alert — IRS Targets Intra-Family Real Estate Transfers
IRS Targets Intra-Family Real Estate Transfers
The IRS is on a national hunt for gift tax evaders, and California is its latest target. The IRS wants a California state tax agency to turn over its database of all the individuals who transferred real estate to relatives from 2005 to 2010 for little or no consideration. The California BOE balked at voluntary cooperation, so the IRS filed a lawsuit in federal court in Sacramento called In the Matter of the Tax Liabilities of John Does. No action has been taken on the request yet.
The IRS nearly admits that it is going on a fishing trip for John Does. However, it considers it to be in well-stocked waters as evidenced by the widespread noncompliance in 15 other states that have already been targeted. Gift tax returns were filed 0% of the time in Ohio and 10% of the time in Virginia and Florida. Other states that gave up this data include: Connecticut, Hawaii, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, Washington, and Wisconsin.
CFO Perspective — What health-care changes become effective in 2011?
The Patient Protection and Affordable Care Act (PPACA), signed into law in 2010, makes significant changes to our health-care delivery system. Here are some of the most important changes scheduled to take effect in 2011.
The cost of over-the-counter drugs not prescribed by a doctor can no longer be reimbursed through a health reimbursement account or a health flexible spending account, nor can these costs be reimbursed on a tax-free basis through a health savings account (HSA) or Archer medical savings account. Also, the tax on distributions from HSAs and Archer MSAs that are not used for qualified medical expenses increases to 20% (up from 10% and 15% for HSAs and Archer MSAs respectively).
CFO Market Week — March 21, 2011
MARKET WEEK: MARCH 21, 2011 The Markets. After the Japanese disaster returned domestic equities to roughly where they were on New Year’s Eve, the indexes began rebounding on Thursday, though they couldn’t repair all of the damage. The three-day selling streak cost the S&P 47 points, but almost half of that loss was regained by week’s end. Ten-year Treasuries gained from safe-haven buying.
CFO Client Alert — There’s Still Time to Contribute to an IRA for 2010
There’s still time to make a regular IRA contribution for 2010! You have until your tax return due date (not including extensions) to contribute up to $5,000 for 2010 ($6,000 if you were age 50 by December 31, 2010). For most taxpayers, the contribution deadline for 2010 is April 18, 2011. Normally, your tax return must be filed by April 15. However, the IRS has extended the deadline to April 18 this year because the 15th is a holiday in Washington D.C. (Emancipation Day). You can contribute to a traditional IRA, a Roth IRA, or both, as long as your total contributions don’t exceed the annual limit. You may also be able to contribute to an IRA for your spouse for 2010, even if your spouse didn’t have any 2010 income.
CFO Market Week — March 14, 2011
MARKET WEEK: MARCH 14, 2011 The Markets. Investors continued to try to figure out which way domestic equities are headed, but the indexes weren’t being much help. The Dow industrials have now made a round trip back to the 12,000 level since early February. The S&P 500 has bounced around between roughly 1300 and 1340 during the same time, though the large caps have recently begun to pull away from the Russell 2000 and the Nasdaq. By week’s end, the Japanese disaster had yet to have a substantial impact on U.S. equities, though 10-year T-bond yields rose slightly.
CFO Market Month VIDEO — February 2011
MARKET MONTH: FEBRUARY 2011 The Markets. Strong performances early in the month helped domestic equities turn in a February that took the Dow to its highest level since June 2008. February also was the third straight month of gains for both the Dow and the S&P 500, which have risen more than 11% and 12% respectively since the end of November. The small caps of the Russell 2000, which suffered in January, rebounded strongly; by month’s end, both the Russell and the Nasdaq had more than doubled since their March 2009 closing lows. The Nasdaq is up more than 11% in the last three months, while both the Russell 2000 and the Global Dow have risen just over 13% in the same time.
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CFO Market Week — March 7, 2011
MARKET WEEK: MARCH 7, 2011 The Markets. As the bull market neared its two-year anniversary this Wednesday, domestic equities investors managed to stay afloat last week–but just barely. Despite some triple-digit intraday swings in the Dow, equities ended the week not far above where they began.
Doctors, Dentists Face Increased Risk as Investment Fraud Targets
Ike Devji, J.D.
The amount of fraud targeting doctors is increasing daily as they, like everyone else, are feeling the pinch of current economic conditions, decreasing compensation and stalled or negative investment momentum.
Those of us in legal and financial professions know that markets are primarily motivated by fear and greed, meaning fear of loss and the desire for gain. Given the rather dismal performance of many real estate and investment portfolios the timing of these con game operators could not be any better to take advantage of your perceived need for huge financial gains in what is perversely marketed as a “safe and predictable” way.
