In Re Seeling, in May 2007, the debtor inherited half of a tax deferred annuity account. She rolled the proceeds of the annuity into an IRA in the decedent’s name for her benefit. Four years later, the debtor filed for Chapter 7 relief. She scheduled the IRA, which was then worth $52,975, and claimed the full amount as exempt pursuant to Section 522(d)(12). The trustee objected to the claim of exemption arguing that the money lost its status as “retirement funds” when it was rolled over into the IRA. The court disagreed and overruled the trustee’s objection. To qualify for the Section 522(d)(12) exemption money must be “retirement funds”, and be held in an account exempt from taxation under Internal Revenue Code sections 401, 403, 409, 408A,414,457 or 501(a) but the court found that Section 511(d)(12) does not specify for whose retirement the money must be set apart. “This Court finds itself in agreement with what appears to be a consensus. Individual retirement accounts are tax exempt under 26 U.S.C.∫ 408 and accordingly are exempt under the Bankruptcy Code, pursuant to Section 522(d)(12). The Bankruptcy Code requires no forensic analysis in order to determine from where those funds arose…”

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.