Relevant Legislation and Court Rulings

Court Opinions, Advisories, Rulings

For your convenience listed below are relevant materials that affect IRAs:

Court Rulings

Swanson v. Commissioner, 106 T.C. 76 (U.S. Tax Ct. 1996)

Harris v. Commissioner, 76 T.C.M. 748 (U.S. Tax Ct. 1994)

Keenan v. Commissioner, 76 T.C.M. 748 (U.S. Tax Ct. 1998)

In re Hughes, 293 B.R. 528 (M.D. Fl. Bankr. Ct. 2003)

Ancira v. Commissioner, 119 T.C. 135 (U.S. Tax Ct. 2002)

Rousey v. Jacoway,  544 U.S. 320 (U.S. Supreme Ct. 2005)

IRS Letter Rulings

Please Note: The information presented is for educational purposes only and should not be construed as tax, legal, or investment advice. Whenever making an investment decision, please consult with legal, tax, and accounting professionals.

It is important to note that IRS Private Letter Rulings have limited precedential value. Any opinion or position expressed by the IRS in a Private Letter Ruling may only be relied upon by the particular party or parties who have requested the Private Letter Ruling, and may not be relied upon by the general public as a whole. Therefore, the IRS Private Letter Rulings listed below are contained for educational purposes and are merely intended to provide you with insight regarding some of the opinions and positions that the IRS has taken in the past regarding certain IRA investments and transactions.

IRS Private Letter Rulings 200732026 and 200732027: In these two letters, the IRS held that shares of exchange-traded funds (ETFs) that hold gold and/or silver do not constitute an acquisition of a collectible if they are acquired in an IRA. As a result, the IRS did not consider money invested in shares of gold and silver ETFs within an IRA to be a distribution subject to an early withdrawal penalty.

IRS Private Letter Ruling 200705032: Allocation of IRAs to a trust upon the death of IRA owner should not be treated as an inherited IRA to decedent's spouse. Thus the rollover of the entire amount into IRAs maintained in the spouse's name would be permissible if accomplished within 60 days and the funds attributable to decedent's IRAs would not be included in gross income of either the trust or the spouse. Additionally, neither the spouse nor the trust was required to withdraw any required minimum distributions with respect to any calendar years prior to rollover.

IRS Private Letter Ruling 200652028: The assignment of IRAs to two separate charities upon the death of IRA Owner in satisfaction of their share of the residue of the Trust as established by decedent will not be considered a transfer under Section 691(a)(2) of the Internal Revenue Code.

IRS Private Letter Ruling 200650023: A surviving spouse may rollover the account balances from her deceased husband's profit sharing plan and SEP-IRAs into an IRA in decedent's name from which she can then receive penalty-free distributions prior to attaining age 59 and a half in accordance with Section 72(t)(2)(A)(ii) of the Internal Revenue Code.

IRS Letter Ruling 199929029: IRA Investment in Subchapter S terminates "s" status.

IRS Letter Ruling 200008044: Division of Inherited IRA to four separate trusts did not count as distribution.

IRS Letter Ruling 200027061: IRA funds acquired from estate of deceased spouse still qualify for non-taxable rollover into survivors IRA.

IRS Letter Ruling 200151049: Married couple acting in good faith granted extension in Recharacterization of Roth IRA back to Traditional IRA.

IRS Private Letter Ruling 200217059: The IRS ruled that the transfer of the physical possession of bullion coins and bullion bars from the possession of the IRA custodian to a non-bank entity that provides precious metals administration and safekeeping services would render the coins and bars collectibles under Code Section 408(m)(3) because the coins and bullion would not be in the "physical possession" of the IRA custodian. As a resule, an IRA that deposits such bullion coins and bullion bars with such a non-bank entity would have to treat such deposit as a distribution from the IRA.

IRS Revenue Ruling 2000-2: An executor may elect under Code Section 2056(b)(7) to treat an IRA and a trust as qualified terminable interest property (QTIP), when the trustee of the trust is the named beneficiary of the decendent's IRA. The surviving spouse can compel the trustee to withdraw from the IRA an amount equal to all the income earned on the IRA assets at least annually and to distribute that amount to the spouse, and no person has a power to appoint any part of the trust property to any person other than the spouse.


IRS Revenue Ruling 2008-5: If an individual sells stock for a loss and causes his or her IRA or Roth IRA to purchase substantially identical stock or securities within 30 days before or after such sale, the IRS will disallow the individual’s loss on the sale of such stock as a wash sale.

DOL Advisory Opinions

DOL Advisory Opinion 2006-09A - Investment by a self-directed IRA in notes being offered by an entity that is over 87% owned by the IRA owner's son-in-law would be a prohibited transaction.

DOL Advisory Opinion 2006-01A - Investment by a self-directed IRA in a limited liability company pursuant to an understanding that the LLC will than invest in a corporation that is a disqualified person would constitute a prohibited transaction.

DOL Advisory Opinion 2000-10A - IRA Investment in Limited Partnership Not a Prohibited Transaction.

DOL Advisory Opinion 1993-33A - A sale and lease back arrangement between an IRA and the daughter and son-in-law of the IRA Owner would be a prohibited transaction.

DOL Advisory Opinion 1990-23A: A personal guarantee by the IRA owner on the loan made to an IRA would be a prohibited transaction under Code Section 4975.

Legislation

The Tax Relief and Health Care Act of 2006
The Pension Protection Act of 2006
Summary of the Economic Growth and Tax Relief Reconciliation Act of 2001