Disclosure statement

Definition

A document provided to participants, explaining certain provisions in non-technical terms.
For IRAs, each participant must be provided with a disclosure statement , which provides explanations on topics including the following:

• The statutory requirements for establishing the IRA
• The limitations and restrictions on the deductions for contributions made to the IRA
• The circumstances under which the IRA may be revoked
• The effect of engaging the IRA in a prohibited transaction
• The tax treatment of distributions
• An explanation of penalties that may apply
• Required minimum distribution  requirements

Referring Cite

Treas. Reg. §1.408-6(d)(4)

Additional Helpful Information

• Providing the IRA owner with a copy of IRS Publication 590 may fulfill  the disclosure requirement

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