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On August 17, 2006, President Bush signed into law
the Pension Protection Act of 2006. Among its
numerous provisions was one that changed the
inheritance landscape for unmarried couples, married
same-sex couples, and anyone else who may be
named as beneficiary of a non-spouse’s retirement
plan.
Before the Pension Protection Act (PPA) went into effect, when a non-spouse inherited assets from a decedent’s qualified retirement plan, such as a 401(k) or 403(b), the non-spouse was forced to withdraw most if not all assets immediately, triggering a large tax liability. The rationale being that the employer did not want to bear the administrative cost of having this non-employee in their plan. The Good News that PPA changed this by allowing all non-spouse beneficiaries who inherit qualified plan assets to roll over his or her interest into a beneficiary Individual Retirement Account (IRA). This allows for the continued tax deferral of accumulation while mandatory distributions are taken over the beneficiary’s life expectancy. The Bad News is that the Internal Revenue Service just released notice 2007-7. |
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| Debra A. Neiman, CFP, is the Personal Finance Columnist at Entrepreneur.com |
Starting this year, the rules for deducting donations
are a bit more stringent. First, charitable contributions
now require documentation. Acceptable forms include
cancelled checks, bank or credit card statements
showing the funds transfer/payment, or written
acknowledgement from the charity with the amount
and date of the contribution. So, before you drop cash
into the Salvation Army Santa’s bucket or into the
collection plate at your house of worship, think about
using a check if you want to take the deduction.
Also, as of August 17, 2006, deducting donated clothing and household goods is no longer allowed unless they are in "used or better" condition. While the IRS hasn't defined what that means, it definitely frowns on donating items of minimal value, like used undergarments. This doesn't apply to contributions of items valued at $500 or more if a qualified appraisal is done. |
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Even Hummer Owners Can Help Reduce Global Warming
Have you ever wondered how much pollution your car
or SUV emits? Well, not only can you can find out, but
you can actually give back to the global environment by
funding alternative energy projects through TerraPass.
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