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1. Risky business of serving the rich and famous  

BY Amy Waldron, CPA
Money. Fame. It’s not just for the entertainers of the world. Accountants can be well-known and famous or, in some cases, infamous. You may have read about pop stars, actors, and professional athletes being “driven to bankruptcy” by their accountants and financial advisers. CPAs providing a menu of services to these high-profile individuals are at risk of being blamed for a decline in the celebrity’s net worth.Family office services provided to the rich and famous, as well as to privately wealthy families, may include traditional accounting services such as a full range of tax, accounting, financial planning,

2. Guidance issued on application of Windsor to retirement plans  

BY Alistair M. Nevius, J.D.
Qualified plans must recognize same-sex marriages after the Windsor decision and must be amended, if need be, to make them conform to the results of that decision. Under guidance issued by the IRS, administrators of qualified retirement plans must recognize the same-sex spouses of legally married participants as of June 26, 2013, but are not required to amend their plans to retroactively recognize participants’ legal same-sex marriages before that date.The Supreme Court, in Windsor, 133 S.

3. IRA participants can purchase longevity annuities   WebExclusive

BY Sally P. Schreiber, J.D.
Final regulations issued on Wednesday (T.D. 9673) permit individual retirement account (IRA) participants to enter into contracts for annuities that begin at an advanced age (often called longevity annuities), using a certain amount of their account balances, without having these amounts count for calculating required minimum distributions from the IRAs under Regs.

4. Supreme Court holds inherited IRAs are not retirement funds   WebExclusive

BY Sally P. Schreiber, J.D.
In a unanimous opinion written by Justice Sonia Sotomayor, the U.S. Supreme Court on Thursday held that funds from an inherited IRA were not retirement funds that were exempt from the debtor’s bankruptcy estate (Clark v. Rameker, No. 13-299 (U.S. 6/12/14), aff’g 714 F.3d 559 (7th Cir. 2013)).

5. Considerations when working with an aging client base  

BY Sarah Beckett Ference, CPA
I provide bill-paying services to my elderly client, and I’m afraid she’s going to run out of money soon. My client’s mental capacities appear to be diminishing. I’m not sure he understands the engagement letter I’ve asked him to sign. My elderly client’s child has a gambling problem and always asks for money.

6. Notice clarifies midyear amendment of certain retirement plans post-Windsor   WebExclusive

BY Sally P. Schreiber, J.D.
The IRS clarified that a qualified retirement plan will continue to be a qualified 401(k) or 401(m) safe-harbor plan if it adopts a midyear amendment to its plan to comply with the rules in Notice 2014-19 requiring qualified plans to conform to the Windsor decision (Notice 2014-37). A safe-harbor 401(k) or 401(m) plan is a plan that meets certain requirements that exempt it from the nondiscrimination rules, among them a restriction on amending the plan after the beginning of the plan year.

7. Final rules govern tax treatment of distributions to pay accident or health insurance premiums   WebExclusive

BY Sally P. Schreiber, J.D.
On Friday, the IRS finalized regulations that provide that distributions from qualified retirement plans to pay accident or health insurance premiums are taxable unless a statutory exclusion applies (T.D. 9665). However, arrangements where amounts are used to pay premiums for disability insurance to replace retirement plan contributions in the event of a participant’s disability are not treated as taxable under the regulations if they meet certain requirements.

8. Rollover contribution to second IRA disallowed  

BY Charles J. Reichert, CPA
The Tax Court held that a taxpayer who received distributions from two individual retirement accounts (IRAs) and later transferred the amounts back into his IRAs had taxable income equal to the amount of the second transfer. According to the court, the plain language of Sec. 408(d)(3)(B) allows a taxpayer to make only one tax-free rollover contribution during a one-year period.

9. Avoiding the squeeze: Trusts, estates, and the new ATRA tax regime   CPEDirect

BY Robert S. Barnett, Esq., CPA, and Elizabeth Forspan, Esq.
Trusts and estates are recognized as separate taxable entities for federal income tax purposes. The estate or trust must file a return on Form 1041, U.S. Income Tax Return for Estates and Trusts, on or before the 15th day of the fourth month following the close of the tax year if it has gross income of $600 or more.

10. The accidental investment adviser  

BY Deborah K. Rood, CPA
As a client’s trusted business adviser, a CPA is often asked to “look over” an investment a client is considering. In other cases, CPAs sometimes obtain a client’s monthly investment account statements in connection with tax and/or bookkeeping services. But based on the experience of the AICPA Professional Liability Insurance Program, such scenarios can lead to professional liability claims alleging the CPA provided erroneous investment advice.
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