The Senate Finance Committee has voted to eliminate stretch IRAs by making all taxes due within five years of inheritance, according to Financial Advisor in "Stretch IRA: Are Its Days Numbered?"
Under present law, a non-spouse may inherit an IRA account and stretch out the taxes owed for their lifetimes. However, Congress, which has attempted to eliminate the stretch IRA in the past, has now seen the possibility of passage after the Senate committee voted to eliminate it.
The legislation is unlikely to pass on its own, but it still stands a good chance of becoming law as part of a larger tax overhaul that Republicans in Congress are expected to propose. For that overhaul to work, the Republicans hope it can be presented as revenue neutral overall.
They want to have any tax cuts paid for by raising other revenue, cutting spending or covered through expected financial growth. Although the revenue consequences of eliminating stretch IRAs are disputed, some believe it could bring in billions more per year. As a result, it is likely to be included as a way to help pay for other tax cuts.
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Reference: Financial Advisor (Dec. 23, 2016) "Stretch IRA: Are Its Days Numbered?"