Tag: estate-tax
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Are Tax Expenditures Reaching Their Goals? A View from the Fiscal Cliff
Taxes help pay for things that make our society better, like roads and schools. The government gives tax breaks to encourage people to spend money. But sometimes these tax breaks don’t work as planned and end up costing the government money. Tax breaks for things like buying a house or going to college are examples…
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It’s 2013: Now What?
In 2011 and 2012, lawyers were advising clients about tax and estate planning opportunities to transfer up to $5 million tax-free. However, Congress passed the American Taxpayer Relief Act of 2012 (ATRA) at the beginning of 2013, making the planning efforts unnecessary in many cases. ATRA maintains the $5 million exclusion amount and other important…
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Pay Early, Pay Less: Maximizing TPT Credit Availability for Married Couples
The federal estate tax credit allows married couples to save on taxes when one spouse dies within 10 years of the other. This happens because some of the property transferred from the first spouse to the second spouse is not subject to tax in the second spouse’s estate. As a result, the combined estate tax…
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A Practical Guide to Trustee Selection: A Review of the Most Common Tax (and Nontax) Traps
When it comes to estate planning, trusts are important. Choosing the right trustee can be challenging and have consequences for taxes. There are three perspectives to consider: the person setting up the trust, the person who will benefit from it, and the trustee. This article focuses on six important things to consider when choosing a…
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Pre-Immigration Tax and Estate Planning: Pitfalls and Considerations Related to Domicile
When it comes to taxes and where someone lives for tax purposes, it’s not just about where they physically live, but also about their intention to stay there. This is determined by looking at things like where their family is, where they work, and where they live. There are also specific rules for different types…
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The Crux of the Clutch CRUT Crutch: How to Fix an Impermissible Split-Interest Trust to Obtain an Estate Tax Charitable Deduction
Creating a charitable remainder trust (CRT) at death is a way to get a tax break in someone’s estate after they have passed away. There are specific rules that the trust must follow in order to qualify for this tax break. If the rules are not followed, the trust can be “broken” and the tax…
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Florida Family Trust Companies: Tax and Nontax Considerations
If a family-run investment company wants to avoid SEC regulation, it can qualify for exemptions. One way is if it only serves family members and is owned and controlled by family members. Another way is if it follows state regulations instead of SEC rules. Using a family-run investment company for family trusts can cause tax…
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Estate Planning in 2015 and Beyond: No Longer a One-Size-Fits-All Approach
In the past, estate planning for lawyers was focused mainly on reducing estate taxes, without considering other important factors like income taxes, asset protection, and charitable planning. However, recent changes in laws and the economy have made estate planning much more complex. Before 2000, estate and gift tax exemption was only $675,000 and the top…
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International Tax and Estate Planning: Use of Check-the-Box Election in the Foreign Corporate-Trust Context
The check-the-box election is really important for international tax and estate planning. One common strategy is to use a foreign corporation owned by a trust to avoid U.S. estate tax on the death of the grantor. But with recent tax law changes, this strategy needs to be adjusted to avoid other tax issues. One way…
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The Tax Cuts and Jobs Act: Still Waiting for That Postcard
President Donald Trump signed the Tax Cuts and Jobs Act into law in December 2017. It made changes to the tax system, with the goal of making it simpler. Some parts of the tax code are easier, but others, especially for businesses, are more complicated. Many of the changes will expire in 2026. So, filing…
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Post-Mortem Considerations with Foreign Grantor Trusts After H.R. 1, Tax Cuts and Jobs Acts
For a long time, tax experts have helped families with one parent from another country and the kids in the U.S. set up trusts with a foreign corporation to save on taxes. But a new law called the Tax Cuts and Jobs Act changed the rules, and now everyone has to rethink their trust plans.…
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Basis Consistency: How to Kill a Fly with a Bazooka
Almost two years ago, the government created new tax rules for large estates that make it more complicated and costly for the people who inherit property. The rules were meant to close a tax loophole and bring in more money for the government, but many tax experts think the government is exaggerating how much money…
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Buying America! Foreign Investment in U.S. Real Property: Recap and New Developments
In 2011, an article was published about foreign investment in U.S. real estate and the tax implications. Since then, there have been changes in U.S. tax laws and the economy, as well as how foreign governments share tax information. The U.S. real estate market has also changed, with more foreign investors buying property. This article…
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Navigating I.R.C. §2036 Tax Planning with Florida Law
For many years, a common technique in estate planning has been to create a partnership or LLC to hold valuable property and then transfer ownership interests to a trust to avoid estate tax. However, the IRS may challenge these transfers as an attempt to pass untaxed wealth to future generations while still maintaining some control…
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Funding the Estate Tax: Defusing the Liquidity Time Bomb
It seems like the rules around estate taxes might be changing soon. If they do, more people might have to pay taxes on their estates when they die. As lawyers, we help our clients figure out how to pay as little tax as possible and in the least disruptive way. In this article, we talk…
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Creating a Florida Irrevocable Homestead Trust for Ad Valorem, Income, and Transfer Tax Purposes
Parents can help their kids buy a home by transferring the home or money to an irrevocable trust. This can help the child avoid taxes and protect the home in case of divorce. The trust needs to be set up in a certain way to work properly. Here are some sample provisions for the trust.…
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Charitable Giving in a Global Environment
In recent years, there has been a big increase in charitable giving across borders, with people in the United States donating a lot of money to help people in other countries. This has made it important for professionals like lawyers and accountants to understand the complicated laws around giving money internationally. It’s not just about…
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Estate Planning During an Election Year: Will It Be 2012 All Over Again?
2020 might be a very busy year for estate planning attorneys because the current laws that give people a big tax break on what they can leave to their family and friends when they die could change soon. The laws are set to expire in 2025, but some people think they might change even sooner,…
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Pre-Immigration Planning with the Foreign Trust: The Intersection of Income and Estate Tax
If someone from another country puts money into a trust in their home country and the trust makes money, the U.S. only taxes the money from the U.S. The trust can also be set up to benefit people in the U.S., but they only pay taxes on the money they get from the trust. If…
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Foreign Grantor Trust Planning: A Flexible Planning Structure for U.S. Income Tax
Tax specialists help families with members in multiple countries set up special trusts to avoid certain U.S. taxes and keep tax advantages. This can be really useful for families where a parent is not from the U.S. and has kids and grandkids who are. The trust helps the family save money on taxes and deal…
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Designing Trust Systems for Florida Residents: Planning Strategies, Things You Should Know, and Traps for the Unwary
Trusts are commonly used for estate and financial planning. They help avoid probate and protect assets. There are different types of trusts and it’s important to understand the implications before funding one. For unmarried individuals, a revocable trust is often used to avoid probate and maintain control over assets. However, in some cases, it may…
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Drafting Wills for the Remarried Spouse
Forms used for the traditional marriage are not suitable for second marriages, especially when children are involved from a previous marriage. Attorneys need to make sure that their clients have updated wills that take into account the unique circumstances of a second marriage. The estate planner should educate their client about the potential conflicts between…
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Waiting for Estate Tax Repeal: What Do You Tell Your Clients in the Meantime?
The 1988 film “The Boost” is about a guy who loses everything when his business is affected by a change in tax laws. The repeal of the estate tax in 2001 could also affect lawyers who help people with their estate planning, but it’s not clear what will happen yet. Planning techniques that made sense…
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PAVE: A Self-Help Technique for Estate Tax Valuation Methods
Federal estate tax is usually calculated based on the value of the assets at the time of the person’s death, even if the value of the assets goes down afterwards. But there is a way for the estate to use the lower value if it’s better for them. It’s called a Protective Alternate Valuation Election…