Clark v. Rameker (573 U.S. 122)
U.S. Supreme Court · decided June 12, 2014 · Supreme Court Database (Spaeth)
- Citation
- 573 U.S. 122 · 134 S. Ct. 2242
- Decided
- June 12, 2014
- Term
- October Term 2013
- Vote
- 9–0
- Majority author
- Justice Sotomayor
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice SOTOMAYOR delivered the opinion of the Court. When an individual files for bankruptcy, she may exempt particular categories of assets from the bankruptcy estate. One such category includes certain “retirement funds.” 11 U.S.C. § 522(b)(3)(C). The question presented is whether funds contained in an inherited individual retirement account (IRA) qualify as “retirement funds” within the meaning of this bankruptcy exemption. We hold that they do not. I A When an individual debtor files a bankruptcy petition, her “legal or equitable interests ... in property” become part of the bankruptcy estate. § 541(a)(1). “To help the debtor obtain a fresh start,” however, the Bankruptcy Code allows debtors to exempt from the estate limited interests in certain kinds of property. Rousey v. Jacoway, 544 U.S. 320, 325, 125 S.Ct. 1561, 161 L.Ed.2d 563 (2005). The exemption at issue in this case allows debtors to protect “retirement funds to the extent those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code.” §§ 522(b)(3)(C), (d)(12). The enumerated sections of the Internal Revenue Code cover many types of accounts, three of which are relevant here. The first two are traditional and Roth IRAs, which are created by 26 U.S.C. § 408 and § 408A, respectively. Both types of accounts offer tax advantages…
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