New IRS Rules Create Headaches For Post-2019 IRA Inheritors

 It took them four-and-a-half years, but the IRS has issued final rules governing mandatory distributions from traditional 401k's, IRAs, and other retirement plans inherited in 2020 or later. To the great disappointment of beneficiaries and their financial planners, the agency embraced the most complex procedure possible as it interpreted a law passed by Congress in 2019. 

The new rules apply when the deceased IRA owner was old enough to be making required minimum distributions (RMDs) of their own before they died. Currently, that requirement starts at age 73, but in 2020, it was age 72. It's scheduled to rise to age 75 in 2033. (Yes, we're only in the second paragraph and things are already getting knotty. Bear down.)  

Good news: The new requirements do not apply to spouse beneficiaries, who will still be able to take over the inherited retirement plan assets and have them treated as if they had always been theirs. There's also forgiving flexibility for so-called "eligible designated beneficiaries," such as those who are disabled or chronically ill, minor children of the deceased owner, and others who are not more than 10 years younger than the deceased owner. 

Other beneficiaries, however -- such as an adult child of someone who was of RMD age -- are now condemned to mandatory distributions over a 10-year period, with requirements to draw money out each year. It's not one-tenth of the account per year -- rather, the amount is driven by an IRS life-expectancy table. Those who miscalculate the amount, or who neglect the chore altogether, will be penalized 25% of the amount that should have been withdrawn, but wasn't. 

The hassle springs from December 2019's SECURE Act, which, among many other retirement-account tweaks, killed the so-called "stretch IRA" -- which previously let beneficiaries minimize distributions by spreading them out over their life expectancies. The new law requires most non-spouse beneficiaries to completely empty an inherited IRA by Dec. 31 of the year containing the 10th anniversary of the account owner's death. For example, an adult child who inherited an IRA from a parent who died in October 2021 has until Dec. 31, 2031 to take all the money out. 

When the law was first passed, tax professionals and financial planners assumed that people covered by that "10-year rule" would be able to take out as little or as much as they wanted until the 10th year, when the entire account would have to be emptied. However, in 2022, the IRS caused an uproar when it said it would force withdrawals every year. The agency then took about two years to reconsider its stance, only to end up imposing the same complex requirement via final rules posted in July.  

The new provision applies to those who inherited an IRA from someone who died in 2020 or after. Between the SECURE Act's passage in 2019 and this summer's announcement, countless beneficiaries were subjected to a multi-year, rolling bureaucratic fiasco, unsure what they were supposed to do. In a rare display of mercy, the IRS said it wouldn't penalize anyone who didn't take a required distribution in 2021, 2022, 2023 or 2024.  

In 2025, however, it's game-on, and affected beneficiaries will have to start taking RMDs. There's no need to "make up" for the years when the IRS waived the penalty, and the 10-year clock is still based on the year of death. (Remember, if you inherited an IRA from someone who died in 2019 or earlier, these new rules do not apply to you.)

It could be in your interest to take out more than the RMD. For example, if the account is big enough, a large, single withdrawal in Year 10 could push you into a higher tax bracket, or have a domino affect on other elements of your tax return that key off your adjusted gross income. Then there's the question of what future tax rate you'll be subjected to in a late-stage empire that's $35 trillion in debt -- as the pending Jan. 1, 2026 expiration of the Trump-era tax cuts swings in the balances of the November election.  

In the first few years after the SECURE Act passed, many financial institutions threw up their hands on inherited IRA RMD calculations, merely telling investors to ask a tax advisor. Now, they're starting to come around. Vanguard, for example, offers an online, inherited IRA RMD calculator that anyone can access.  

As always, the maddening complexity of the income tax makes us wish 1913 never happened...

https://www.zerohedge.com/personal-finance/new-irs-rules-create-headaches-post-2019-ira-inheritors

US Preps To Ban Chinese EV Software With Level 3 Automation On All Roadways as National Security Risks

 If levying more than 100% tariffs on Chinese-made electric vehicles wasn't enough, the Biden administration is now gearing up to propose a ban on Chinese software in autonomous and connected vehicles on US highways, citing national security risks.

Reuters reports the new rule would prohibit Chinese software with Level 3 automation and above on all US roadways. This would also ban all testing of Chinese autonomous vehicles in the US. 

The administration, in plans first reported by Reuters, will also propose barring vehicles with Chinese-developed advanced wireless communications abilities modules from US roads, the sources added.

Under the proposal, automakers and suppliers would need to verify that none of their connected vehicle or advanced autonomous vehicle software was developed in a "foreign entity of concern" like China, the sources said. -RTRS 

A Commerce Department spokesperson told Reuters that the department "is concerned about the national security risks associated with connected technologies in connected vehicles."

Last month, the Commerce Department said it was planning to issue the new proposed rules on connected vehicles in August and impose software limits on vehicles produced in China and other countries deemed adversaries. 

The department's Bureau of Industry and Security said the rule "will focus on specific systems of concern within the vehicle. Industry will also have a chance to review that proposed rule and submit comments."

Earlier this year, President Biden said, "Connected vehicles from China could collect sensitive data about our citizens and our infrastructure and send this data back to the People's Republic of China."

Besides the spying car threat, Chinese EVs imported into the US have been deemed an existential threat to the American auto industry, with the Biden administration proposing more than 100% tariffs. Remember, Biden is controlled by unions, such as the ones in the auto industry, so he must cater to their demands. 

US Senator Sherrod Brown (D-OH) wrote in a letter to the president in April:

"The US must ban Chinese electric vehicles now, and stop a flood of Chinese government-subsidized cars that threaten Ohio auto jobs, and our national and economic security."

Looking ahead this week, the White House and State Department will host a meeting with allies and industry leaders to "jointly address the national security risks associated with connected vehicles" on Wednesday. Sources informed Reuters that additional details about the new rule should be unveiled at this week's meeting.

https://www.zerohedge.com/technology/us-prepares-ban-chinese-evs-level-3-automation-all-roadways-citing-national-security

UK Riots: The Agenda Becomes Clear...

 by Kit Knightly via Off-Guardian.org,

Those outside the UK might not have heard, but it’s been a violent week in the UK. Here’s a quick rundown of the official story so far:

Four days ago a 17-year-old allegedly walked into a children’s “Taylor Swift dance class” (whatever that might be)  in Southport and started stabbing little girls, wounding 10 and killing 3.

It was initially reported the boy was a muslim immigrant.

This story was, however, reversed within hours, the new story “revealing” that he was actually born in Cardiff, the son of Rwandan immigrants. He was named as “Axel Muganwa Rudakubana” late yesterday.

His  religious affiliation, if any, seems not to have been firmly established.

Another young man was, allegedly,  arrested later while in possession of a machete and balaclava at  a vigil for the victims. He was, again, reportedly Muslim.

This, allegedly, resulted in what are described as protests and riots, the destruction of a brick wall outside a mosque and the burning of a police van.

Further alleged riots subsequently sprang up in London and Hartlepool.

This is the current narrative. None of the details has been substantiated as yet, so how much you decide to believe is your personal preference at this point.

At OffG we reserve the right to be sceptical. Of everything.

There are a lot of unanswered questions, and the current level of  “mourning” by government institutions and groups in no way directly affected  by the tragedy always has a taint of the performative that shouldn’t be too quickly conflated with  insincerity or worse.

And, of course, all of this is coming hot on the heels of the Manchester Airport incident, where police officers and Muslim youths allegedly clashed violently in as yet obscure circumstances.

Plus the violence in Whitechapel and Leeds a couple of weeks ago.

Then, as now, both sides were provided with adequate rage-bait to get them worked up.

Whatever the truth of this latest incident, and whatever long term aims it might be used to further, this “strategy of tension” has an immediate political agenda already becoming clear – and it’s as predictable as ever.

1. Further limit social media/free speech

2. Normalise constant surveillance

Attacking free speech is the ever-present, eternal agenda that comes before everything else and it’s been a real pile-on the last few days.

The Hill headlines “Misinformation floods social media in wake of breakneck news cycle”, Sky News went with “Southport attack misinformation fuels far-right discourse on social media”

ABC News reports: “Online misinformation fueled tensions over the stabbing attack in Britain that killed 3 children”

The Byline Times collectively scolds society’s negligence: “‘We All Need To Consider Our Role in the Wild West of Social Media Hypercriminality’”

The Institute for Strategic Dialogue (an NGO funded by the usual suspects) has timelined it all for our convenience: From rumours to riots: How online misinformation fuelled violence in the aftermath of the Southport attack

The BBC asks “Did social media fan the flames of riot in Southport?” and Telepgraph answers very much in the affirmative, cutting right to the heart of the matter [emphasis added]:

Unregulated social media disinformation is wrecking Britain – Free speech must come with accountability

The Times skips past establishing the problem right to apportioning blame: “Who is behind Southport social media storm — and can they be stopped?”

The Guardian has decided the answer is TikTok (and AI): “How TikTok bots and AI have powered a resurgence in UK far-right violence”

The New York Times demands to know what social media companies are going to do about it:

The U.K. Riots Were Fomented Online. Will Social Media Companies Act?

One particularly drunk uncle decided the whole thing is Putin’s fault, for some reason, but most of the fire is directed at Twitter/X.

Writing in Prospect, former-Guardian editor Alan Rusbridger claims “Elon Musk’s misinformation machine made the horrors of Southport much worse”, while Forbes wails “Elon Musk Isn’t Stopping Misinformation, He’s Helped Spread It”.

This is dual-purpose propaganda, it attacks the idea of free speech but also reinforces Musk/X’s totally false reputation as the savior of free expression.

You cannot begin to fathom how irritating it is to the ruling class that ordinary people are allowed to just say whatever they want whenever they want – including having the audacity to fact check the media in real time, with no repercussions at all.

That, more than anything else, has stalled the Great Reset in its tracks.

So it has to go.

Finally and forever.

It’s why  almost everything in the news cycle – from disease to climate change – can  allegedly be “solved” with censorship.

Because once free speech is abolished everything that comes afterward gets so much easier – including the second agenda being pushed right now: Mass surveillance and facial recognition technology.

When it comes to this secondary goal the media are yet to reach the “call for action” phase. They are still locked into “fearmongering”, with widespread warnings about nineteen future “far-right” marches and calls to proscribe Tommy Robinson’s EDL as a “terrorist organization”

Which, again, has the useful secondary effect of making this gentleman look more like a genuine force for opposition.

Funnily enough, UK Home Secretary Yvette Cooper was already discussing giving police “new powers to crackdown on antisocial behaviour” just a day before the Southport attack occurred.

But it fell to Prime Minister Sir Keir Starmer to formally lay it out in his address yesterday afternoon [transcript].

Pledging to counter the “far-right” with a new police division, and increased use of surveillance and facial recognition technology to “limit their movements”:

Wider deployment of facial recognition technology…And preventive action – criminal behaviour orders…To restrict their movements…

And firing a warning shot across the bows of social media:

And let me also say to large social media companies and those who run them…Violent disorder clearly whipped up online…That is also a crime. It’s happening on your premises. And the law must be upheld everywhere.

He even pointedly made clear his response wasn’t just about now or about countering the “far-right”, rather it was about ALL civil disobedience, for any reason:

A response both to the immediate challenge which is clearly driven by far-right hatred. But als “all violent disorder that flares up […] whatever the apparent cause or motivation – we make no distinction…Crime is crime.”

That means everything.

It means pro-free speech rallies, it means “bladerunners” cutting down ULEZ cameras. It means any potential anti-lockdown and/or anti-vaccine mandate protests during “the next pandemic”.

This is the beginning of a new crackdown on digital free speech and real-world protest…

and people are cheering him on, of course. Because they believe the State is our only shield from the nasty brick throwing baddies of the far-right.

To sum up the last three days in British politics for those not well versed in reading past headlines  and propaganda:

For the cost of one broken wall and a burnt out police van, the new “Labour” government have just won public approval  for new police powers and open season being called on  what remains of our free speech – and they get to distract from the now-inevitable tax raises too.

Not a bad trade.

https://www.zerohedge.com/political/uk-riots-agenda-becomes-clear

British star Adam Peaty furious Chinese swimmers named in doping scandal competed

Chinese swimmers are at the center of a sizeable Olympic controversy.

China stunned the United States team by winning a gold medal in their 4×100 medley on Sunday, marking the first time Team USA didn’t win gold in the event since 1980 — an Olympic Games in Moscow that they didn’t even compete in.

Qin Haiyang and Sun Jiajun, along with 23 other Chinese swimmers, tested positive for a banned substance at the Tokyo Olympic Games in 2021 but were allowed to compete anyway.

3

Adam Peaty reacts after competing in the Men’s 4x100m Medley Relay Final.Getty Images

The China Anti-Doping Agency determined the culprit for the positive test was consuming contained food, a decision upheld by the World Anti-Doping Agency.

Britain’s Adam Peaty, whose team finished fourth in the race, just missing out on a medal, has questions about the legitimacy of China’s performance.

“If you touch and you know that you’re cheating, you’re not winning, right?” said Peaty, a three-time gold medal winner for Great Britain in his career. “I don’t want to paint a whole nation or group of people with one brush, I think that’s very unfair.”

3

China’s Xu Jiayu, Qin Haiyang, Sun Jiajun, and Pan Zhanle pose for a photo with their gold medals during the awards ceremony for the men’s 4×100-meter medley relay on August 4, 2024.AP

He later made a plea for people to “do their job” as it relates to incidents like this.

3

United States’ Ryan Murphy, Nic Fink, Caeleb Dressel, and Hunter Armstrong pose for a photo with their silver medals during the awards ceremony for the men’s 4×100-meter medley relay at the Summer Olympics.AP
“To the people that need to do their job – wake up and do your job.”

At the time of the controversy, which surfaced just before the Olympic Games of 2021 — delayed a year due to COVID — the World Anti-doping Agency maintained that they were “not in a position to disprove” the conclusion of China’s Anti-Doping investigation.

https://nypost.com/2024/08/04/sports/british-star-furious-chinese-swimmers-named-in-doping-scandal-competed-in-olympics/

PBoC's Gold Conduit Revealed: Chinese Central Bank Did Not Stop Buying Gold In May

 By Jan Nieuwenhuijs of Gainesville Coins

This article is an analysis of how the Chinese central bank (PBoC) buys gold in London from Western bullion banks. Because the bullion banks take care of the gold transport for the PBoC, the shipments from London to Beijing are disclosed in UK customs data. The customs data reveals that the PBoC continued to buy gold in May — when it communicated to the market it discontinued buying — at a rate of 53 tonnes. The PBoC stated it stopped buying to dampen the gold price so it could acquire more gold.

Several months ago, I discovered that supply in the Chinese gold market was outstripping demand. During my investigation of this anomaly, I found circumstantial evidence that led me to conclude the surplus is imported in 400-ounce bars from the United Kingdom, and surreptitiously procured by the PBoC.

Let’s go through some of the mechanics of the global gold market before we can stitch it all together.

PBoC Gold Buying Hidden in Plain Sight

In global customs data — officially called International Merchandise Trade Statistics (IMTS) — all gold disclosed is “non-monetary,” meaning not owned by a monetary authority such as a central bank. In the United Nations IMTS rulebook it reads that customs data excludes monetary gold:

Since monetary gold is treated as a financial asset rather than a good, transactions pertaining to it should be excluded from international merchandise trade statistics.

Though, someone familiar with the matter but who prefers to stay anonymous, shared with me that gold import and export data can relate to monetary gold. Commonly, central banks will buy gold from Western bullion banks that arrange transportation and insurance of the metal. The moment these banks ship the gold from the UK it is thus non-monetary bullion, but when it arrives in China it is monetized (changes ownership) and brought to vaults of the central bank, supposedly in Beijing.

Exports from the UK are mainly from the wholesale gold market in London where virtually all bars traded weigh 400 ounces. The retail market in Britain dealing in smaller bars pales in comparison, and the refining industry in the UK is relatively small.

In turn, at the core of the Chinese domestic gold market, which excludes Free Trade Zones (FTZs), is the Shanghai Gold Exchange (SGE) where predominantly 1Kg gold bars are traded.

Chart 1. In the entire history of the SGE large 400-ounce bars have hardly ever traded. The most traded product on the SGE is the 1Kg 99.99 fine physical contract.

The private sector in China trades 1Kg bars through SGE, while the central bank buys “large bars” (400-ounce bars) abroad. As all gold on the SGE is traded in yuan, the PBoC can only diversify its international reserves by buying gold overseas with dollars or other foreign exchange. Aside from logic, there are multiple sources that have made clear the PBoC doesn’t purchase gold on the SGE. For example, the World Gold Council (WGC, page 9), the SGE (page 4), and it was confirmed to me personally by an ex-gold trader from a Chinese state-owned bank.

The SGE captures the lion share of all gold trading in the Chinese private market. There are rules and incentives that steer most supply—imports, domestic mine production, and recycled metal—towards the SGE, which for liquidity reasons attracts most demand. Hence, the gold withdrawn from the SGE vaults is often used as a proxy for Chinese wholesale demand. In a formula:

SGE withdrawals = net import + domestic mine output + recycled metal

Chart 2. Apparent Chinese gold supply and demand.

Before 2022, gold supply and demand in the Chinese market matched. SGE withdrawals were always higher, to varying degrees, than net import plus domestic mine output, the difference being gold recycled through the central bourse.

If it were true that bullion banks ship gold to China, as non-monetary gold visible in customs data, that doesn’t flow into the SGE system, we would see a discrepancy between apparent Chinese gold supply and SGE withdrawals. As more gold would be supplied to China than sold through the SGE. In a formula:

SGE withdrawals < net import + domestic mine output + recycled metal

Chart 3. Starting in 2022 there has been an increase in months wherein net imports alone are higher than SGE withdrawals.

Indeed, both in 2022 and 2023 China’s net import plus mine output transcended SGE withdrawals (let alone if we would add recycled gold).

Chart 4. In 2022 and 2023 apparent supply was higher than demand (SGE withdrawals).

As we shall see, the surplus in the Chinese gold market—imports that are not sold through the SGE—is being absorbed by the PBoC.

Readers with deep knowledge of the Chinese gold market might think: “what if the large bars are refined in FTZs and loaded into SGE vaults without being withdrawn?” I checked with a source that has connections to refineries in China, and according to this person the refineries don’t use any large bars as feedstock for producing 1kg bars for the SGE*. Another contact I have, close to the SGE, shared with me that SGE inventory in April 2024 accounted for about 300 tonnes. Inventory had gone up recently together with a rise in the price of gold, this person said. However, the increase in SGE inventory can’t make up for the surplus in the market, which is at least 400 tonnes according to my calculations.

More Data Supporting the Thesis

By comparing estimated central bank purchases by the WGC, based on field research, to official statistics regarding gold buying by central banks, we know that since the start of the Ukraine war, in February 2022, monetary authorities in aggregate are secretly buying much more than they report. I have written before that these covert purchases can be attributed for roughly eighty percent to the PBoC.

Chart 5. Total estimated central bank gold buying by the WGC, versus official statistics by the International Monetary Fund (IMF). The difference reflects covert acquisitions.

“Unreported” PBoC gold purchases exploded when $300 billion in foreign exchange reserves from the Russian central bank were frozen by the West early 2022 due to the war. Notably, the UK began exporting 400-ounce bars to China in huge tonnages at the same time. Coincidence? I think not. Ever since, China has taken over gold price control from the West and broke the gold price’s correlation with “real rates” (10-year TIPS yield).

Chart 6. The UK’s direct export to China is likely destined for the PBoC

Chart 7. The US dollar gold price versus the 10-year TIPS yield (real rates). Early 2022 the correlation broke because of, inter alia, massive PBoC purchases

The final clue is that there is a relationship between what the Chinese central bank officially reports to be accumulating, and gold exports from the UK to China. What frequently happens, exposed by comparing these numbers, is that the PBoC starts buying gold a few months before it tells the world about it, and severely underreports its additions. This was the case in 2015, 2019, and 2022.

Chart 8. Official data on PBoC gold buying versus UK gold exports to China. Previous exports from the UK for the PBoC were not large enough to create an apparent surplus in the Chinese gold market.

Conclusion

It all fits and makes sense: the motive, the data, and the anecdotal evidence. Let’s summarize our key findings:

• The Chinese central bank desperately needs to diversify its foreign exchange reserves since the beginning of 2022. Since then, the PBoC secretly buys large amounts of gold.
• At the same time, export of large gold bars from the UK to China explodes.
• A “surplus” in the Chinese market appears, while the bullion is not to be found in SGE vaults. As if it has gone up in smoke.
• A source indicates that gold shipments for central banks are often included in customs data.
• There is a correlation between PBoC official buying and UK exports to China, suggesting the Chinese central bank buys gold in England’s capital and lets banks supervise transport (maybe because the PBoC reaches the limits of its own capacity to ship gold when volumes are sizable).

It all points towards UK gold exports to China are destined for the PBoC—although probably not every ounce of these flows is for the Chinese central bank. Clearly, the PBoC is accumulating more gold than it wants to disclose.

When the PBoC stated it had stopped buying gold in May 2024, after continuous purchases for 18 months, I didn’t believe it. The PBoC has few reasons to cease growing its gold reserves in the current geo-political and monetary landscape with a plethora of challenges.

Probably, the PBoC wants the most gold for its dollars, so when the price rises fast it will signal it stopped buying, trying to cool the market. In the meantime, the United Kingdom exported 53 tonnes to China in May, of which likely most found its way to Beijing.

Note, the PBoC also buys in Switzerland and other countries, flows that can be included or excluded in customs reports, but it’s impossible, from where I stand now, to measure all these separately.

Finally, some of my previous analyses have been skewed by the above. Private demand in China has been lower because some (“non-monetary”) imports were taken by the central bank.

https://www.zerohedge.com/markets/pboc-gold-conduit-revealed-chinese-central-bank-did-not-stop-buying-gold-may