A proposed tax law about to go into effect has both some positives and negatives Clark wants to tell you about. First of all, there is a new gift for 2010 that could be potentially great for you. If you have money in an IRA or 401k from an old job, you can now convert that to a Roth. You will pay the tax bill over 2011 and 2012 and then it grows tax free. That means that if someone has a $50,000 converted IRA and they give it as an inheritance, it will have an ultimate value of $41 million. That’s $41 million TAX FREE! Why would Congress do this? It’s all in an effort to make the budgets appear like they’re giving people a break now. People will make up for it in 2011 and 2012, when they pay tax. But it’s still a great deal for consumers. You will want to discuss with your accountant whether you should do a non-deductible IRA. In addition, there is a “kid tax,” a punitive tax that affects children who have inherited money. It used to affect kids up to age 15, but it’s been raised to 18. It basically punishes kids who have jobs. If they save too much on what they earn, they will be subject to the kiddy tax. There are ways to get around it, but talk to your accountant. One way is to transfer money from that account to a 529 plan. Read more on the bill here.