Pension Protection Act of 2006

Pension Protection Act of 2006

By: Martin M. Shenkman, CPA, MBA, JD

The 2006 Pension Protection Act has brought on some significant changes to the PPA.

  • The new act will now allow a non-spousal rollover of an inherited IRA. For example, lets say Dad dies and names daughter Jane as sole beneficiary of a 401k. She can take it and roll it over into an account for her benefit (even though she is a child and not a spouse). But it must say fathers name, deceased, IRA for the benefit of daughter Jane; it cant just say Jane’s IRA. This adds some flexibility.
  • We have been fighting for the ability to let charitable contribution deductions to be made directly from IRAS. You can now, for 2006-2007, give up to $100,000 from your IRA to a charity and not have to report that distribution in income. But they must follow certain criteria, such as the contribution meeting regular requirements for a charitable contribution deduction, must be at least 70 ½ on the day of the transfer.
  • You can make a direct rollover from a qualified retirement plan to a roth IRA (individual retirement account).

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