Estates & Taxes

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 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!

Wednesday, December 8, 2010

Obama Cuts Tax Deal with Republicans!


Obama held a press conference on 12/6/10 to announce new Tax Deal with Republicans!  Here is what we know so far:

  • 1) two year extension of the Bush Tax Cuts (no restriction on taxpayer income);
  • 2) one year 2% reduction on Social Security withholding tax;
  • 3) Capital Gains and Dividend income will be taxed at 35% (for two more years) but perhaps the most contentious item of all -

Read more . . .

Wednesday, January 13, 2010

No Estate Tax in 2010 Could Mean Major Problem for Surviving Spouse

When the law was passed in 2001, almost no one believed that Congress would actually allow the Estate Tax to end in 2010, even for just one year.  When the Senate failed to act this past December, the unthinkable happened – the Estate Tax was repealed!  There is no Estate Tax for individuals dying in 2010!  You might think that is good news but you might be wrong!  The repeal of the Estate Tax may be a major problem for the surviving spouse and it could cost the beneficiaries of the estate significant tax dollars as well!  Here’s why.

Read more . . .

Tuesday, June 30, 2009

New Florida Residents

Residency & Domicile

Perhaps you recently moved to Florida, perhaps you’ve had a residence in Florida for years, but recently have decided to change your domicile from your former Northern state (New York, Pennsylvania, Massachusetts, New Jersey, etc) to Florida  – what do you need to do in order to change your domicile so that you can avoid your “former” Northern state’s taxing regime?

Read more . . .

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