Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education, American Academy of Estate Planning Attorneys, Inc. When considering different estate planning strategies and which direction to take, it’s important to consider the impact on basis. “Basis” is the benchmark used for income taxation. What does income tax basis have to do with estate planning? Property included in your taxable estate at your death gets a “step-up” in basis to its value at your death. (Certain … [Read more...] about Income Tax Basis in Estate Planning – Part 2
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education, American Academy of Estate Planning Attorneys, Inc. As you likely know, in the final days of 2017, Congress passed, and the President signed, a new tax law. It substantially changes the federal income taxation of individuals and couples. As I blogged in December, the biggest changes are the near-doubling of the standard deduction amount and the cap on the state and local income tax deduction. The result is that most … [Read more...] about New Tax Law May Affect State Income Tax, Too!
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education, American Academy of Estate Planning Attorneys, Inc. This is another in a series of blogs on the basics of estate planning. The last blog examined the basics of powers of appointment. This blog will examine how they can impact taxation. From a gift and estate tax perspective, there are two kinds of powers of appointment, a limited power of appointment (or “LPOA”), and a general power of appointment (or “GPOA”). They … [Read more...] about Basics of Estate Planning: Powers of Appointment – Part 2
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education, American Academy of Estate Planning Attorneys, Inc. This is another in a series of blogs on the basics of estate planning. President Trump and Republican lawmakers recently unveiled a Blueprint for tax reform. Here’s a link to a story about this in U.S. News. Here’s a link to a deeper look at the proposal in the Atlantic. As I discussed in last week’s blog, there are many uncertainties in the plan and in the … [Read more...] about How Tax Reform Could Impact Various Families
By: Matthew M. Shafae, Attorney Litherland Law Firm Am I going to owe taxes if I inherit property? We get this question all the time. And we don’t blame you. It can get confusing. So, let’s see if we can clear up this issue. Let’s segregate the different taxes that might be owed, and then we can see if anything will be owed. Estate Tax The estate tax—or death tax, as it’s sometimes called—is a transfer tax on assets transferred from someone who died to someone who is living. The tax … [Read more...] about Am I going to owe taxes if I inherit property?
By: Justin M. Kennedy, Attorney Litherland, Kennedy & Associates, APC, Attorneys at Law I spoke with a client, William, the other day who shared that he purchased his home many years ago for fifty thousand dollars ($50,000). That same home is now worth an estimated one and a half million dollars ($1,500,000). If the home was sold today, the capital gains taxes would be calculated on the difference between the sale price ($1,500,000) and the basis in the property ($50,000), for a taxable gain … [Read more...] about Exclusion of Gains from Sale of Personal Residence
By: Matthew M. Shafae, Attorney Litherland, Kennedy & Associates, APC, Attorneys at Law The “T-word” usually makes our eyes glaze over and we picture an overworked accountant wearing a green eyeshade crunching a bunch of numbers for us every April. Well, unfortunately, I can’t make them go away, but I can attempt to explain how taxes may impact your estate planning. Within the context of your estate plan, there are typically three main taxes that are relevant: the estate tax, the income … [Read more...] about Sorting Through the Taxes That May Impact Your Estate Plan
Estate tax efficiency is an important consideration for high net worth individuals. There are a number of states in the union that impose estate taxes on the state level. We practice law in California, and we get a break here, because there is no California state estate tax. However, we do have to be concerned about the federal estate tax. You may hear people say that the estate tax is only a factor for people who are very wealthy. Depending on your definition of "very wealthy," this may not be … [Read more...] about Can a Trust Provide Estate Tax Efficiency?
There are a lot of things that you should know when you are devising your estate plan. If you do not act in a fully informed manner, you could make mistakes that negatively impact your loved ones. When you discuss things with a licensed estate planning attorney, you can go forward in a fully informed manner. Ultimately, you can emerge from the interaction with a personalized estate plan that ideally suits your needs. In this post we will look at some questions that you may want to ask your … [Read more...] about What Questions Should I Ask an Estate Planning Attorney?
There can be taxes that come into play when you are planning your estate. You should know the facts so that there are no misconceptions. In this post we will look at these taxes, with an emphasis on the capital gains tax. Federal Transfer Taxes The tax man does not want you to be able to transfer large sums of money free of taxation. To prevent this, there is a federal estate tax, and there is a federal gift tax. These two taxes are unified under the tax code. You can transfer a certain … [Read more...] about What Is a Capital Gains Tax?