The Duffey Law Firm Blog

Monday, April 3, 2017

DLF Trump Tax Reform Update #4

Takeaways from Trump Tax Reform Update #4

  • Legislative loss on healthcare may make tax reform even more difficult
  • Chairman Brady, House Ways & Means says his committee will go BIG on tax reform, not just tinker with tax laws
  • Offsets to tax reductions which will bring revenue into the government may be more important than ever, Republicans look for ways to replace the $1 Trillion they hoped to get in revenue savings under repeal of Obama care
  • Look for discussions on new tax basis rules and possible new capital gains tax on death
  • Expect new legislation to be done under reconciliation with perhaps a 10 year sunset

Read more . . .


Tuesday, February 7, 2017

DLF Estate Tax Repeal Update #3

As discussed in our DLF Estate Tax Repeal Update #2, many estate plans utilize a Family or Bypass Trust along with a Marital or Spousal Trust.  Due to the use of “formula funding language” used by most if not almost all estate planners over the last sixteen years or so, the repeal of the estate tax could result in all the assets of the decedent being funded into the Family or Bypass Trust.  The problem is, unless that Bypass Trust allows for distributions to the surviving spouse, the widow or widower of the decedent could be left with little or no assets.  Of course, there are many other potential unintended consequences if the estate tax is repealed, or if rules on income and capital gains taxes are substantially changed, which will cause many taxpayers to look to amendment or in some extreme cases even termination of their trusts.


Read more . . .


Wednesday, February 1, 2017

Could Trump Tax Reform Be Bad For You and Your Family?

One of the issues that we see with the discussion of the proposed Trump Tax Reforms is that many clients assume that Tax Reform will mean lower taxes.  If Trump and the Republicans lower taxes, how could that be a bad thing?  Under all circumstances, wouldn’t lower taxes have a positive impact on all taxpayers? And isn’t that especially true for affluent tax payers? As any student of tax law in the United States can attest, tax reform doesn’t always mean lower taxes for all and of course, in the past, tax reform has led to some unintended consequences.


Read more . . .


Monday, January 16, 2017

Tax Reform Under the New Trump Administration

Early in 2017, President-Elect Trump will be taking office with a large majority of Republicans in the House (235 to 191) and a majority of Republicans in the Senate (51 to 47).  One major focus of the new administration will be tax reform.

What exactly will the new tax legislation look like? At this point, there are more questions than answers: Will the Republicans be able to pass what they want in the way of tax reform or will the Democrats block or modify the changes.  Exactly what specific terms and policies do the Republicans want to accomplish in their tax reform? Are there differences between the designs of the Congressional Republicans and the new president on what new tax reforms should look like? Will the Republicans modify their goals in tax reform in order to get at least some support from the Democrats in Congress? How will the tax reforms coordinate with efforts to balance the budget and hopefully not add to the already staggering federal deficit? How will potential tax reform be impacted by other administration priorities like repeal of the healthcare law, illegal immigration, major infrastructure projects, etc.?


Read more . . .


Thursday, July 10, 2014

State "Conversion Laws" Could Change Existing Same-Sex Legal Relationships and Have Uncertain Tax Implications

Brian K. Duffey, Esq.

The following is a very brief overview of some of the key points, which were addressed in an article recently authored by Patrick J. Duffey and Alexander Popovich.  For more information and citations please see: Implications of State “Conversion” Laws for Same-Sex Couples, Estate Planning, July 2014, Vol 41 number 7.


Read more . . .


Tuesday, June 3, 2014

5 Key Thoughts on Florida Estate Planning

Thousands of books and articles have been written on the subject of estate planning.  Creating a plan to serve the best interests of your family and loved ones, requires a significant level of knowledge, experience and expertise.  Clearly estate planning is a complicated topic which encompasses a broad array of issues such as family, taxes, divorce, state and federal laws, accounting, substance abuse, investments and much more that cannot be dealt with on a deep or meaningful level within the confines of a brief article such as this one.  Nonetheless, this article will explore some key concepts and hopefully provide you with some important points to begin your planning process.


Read more . . .


Wednesday, September 12, 2012

President Obama’s Tax Plan for 2013

Published by the Department of the Treasury in February of 2012, the General Explanations of the Administration’s Fiscal Year 2013 Revenue Proposals (the so-called “Greenbook”) outlines the Administration’s specific policy positions on tax for 2013.  Given the upcoming election and the scheduled sunset of the recently extended Bush-era tax cuts, the 2013 Greenbook takes on particular significance for those individuals and families that are considering estate planning issues.


Read more . . .


Friday, March 23, 2012

Paul Ryan’s New Tax Plan

Paul Ryan and the Republican party cite coming debt crises as necessity for major tax changes.  Democrats react with charges that the Republican budget proposal hurts seniors without focus on revising or eliminating the tax breaks for the wealthy.

Ryan’s plan sets discretionary spending at $1.028 trillion for FY 2013.  This budget is approximately $19 billion less than the spending cap agreed to by President O’Bama and the Republican party on the deal to raise the national debt ceiling.

The Ryan budget: converts the current tax brackets from six to two: 10% & 25%; cuts the corporate rate from 35% to 25%; eliminates the Alternative Minimum Tax; overhauls Medicare for those under the age of 55; cuts the deficit by $3.3 trillion in ten years; cuts taxes on corporations with oversees operations.

Congressional Budget Office says that 15% of US revenues goes only to service the National Debt.

No mention in current proposal on the Federal Estate Tax, Gift Tax or the Generation Skipping Transfer Tax.


Saturday, December 18, 2010

New Obama Tax Law

President Obama signed the “Middle Class Tax Relief Act of 2010” yesterday December 17, 2010.

Key points of the New Tax Law:

  • $5 Million Dollar Exemption for Estates
  • $5 Million Dollar Exemption for Lifetime Gifts
  • $5 Million Dollar Exemption for Generation Skipping Transfers
  • Portability of the Estate Tax Exemption for married couples

Read more . . .


Tuesday, December 14, 2010

States to Lose Revenue Under Obama – Republican Tax Deal

One aspect of the Estate Tax Deal which passed its first legislative hurdle in the Senate last night is the loss of potential revenue to the States.

California could lose as much as $2.7 Billion due to the change in the Estate Tax Law according to a Bloomberg.com report dated 12/14/10.

Under the current law, the Estate Tax would allow for a $1 Million Dollar Exclusion in 2011, and any amount over that would be taxed at 55%.

An important element of that taxing regime (current law) is that it would allow States to participate in the revenue stream created by that tax.   This is the so called “Soak Up Tax” which was part of the Estate Tax prior to the final years of the Bush Tax Cuts.

The “Soak Up Tax” was a feature of the prior taxing regime.  The Soak Up Tax is reportedly not part of the Obama – Republican Tax Deal.  The Soak Up Tax allowed states like Florida (that has no estate tax of its own) to benefit when a resident of that state owed estate taxes to the Federal government without in any way increasing the taxpayer’s estate tax liability.

The bottom line – some states like California and perhaps Florida may have been counting on those revenues to help them balance revenue starved budgets!


Tuesday, December 14, 2010

Opportunities Under New Estate Tax Law

Initial reports out of Capital Hill indicate that the new Estate Tax Law contained in the “Framework” agreed to by Obama and the Republicans could be a real opportunity for wealthy Americans.

According to sources on the Hill, not only will the Estate Tax Exemption Amount be $5 Million Dollars, but the Gift Tax Lifetime Exclusion Amount and the Generation Skipping Transfer Tax may also be set at $5 Million Dollars!

That would potentially provide wealthy Americans with an opportunity to transfer significant assets to second and third (and more remote) generations without the penalty of transfer taxes.

Some taxpayers may consider utilizing their lifetime gift exemptions to transfer up to $5 Million Dollars to children and grandchildren in trusts known as “Dynasty Trusts” or “Generation Skipping Transfer Tax Exempt Trusts.”

Properly structured strategies could result in beneficiaries receiving the benefits of significant wealth over many generations without any imposition of transfer taxes at each generational level.

Stay tuned for more details as the bill makes its way to the President’s desk!


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