PATH – Protecting Americans From Tax Hikes Act of 2015

We in the tax and estate planning world love acronyms so no surprise the governments newest tax law is called “PATH” which stands for Protecting Americans from Tax Hikes act of 2015.   I like to blog about estate taxes primarily but as the focus in estate planning moves toward incomes taxes I like to mention them as well when I can.  Here’s a link to the government website:

Protecting Americans From Tax Hikes Act of 2015

Frankly a lot of the stuff in there doesn’t apply to most of my clients.  For example I saw that it gives permanent extension of certain provisions related to non-US shareholders in RICs. I had to look up what a RIC is!  It appears to be a “regulated investment company” so now I have learned something new for the day!

Other areas of importance to few of my clients include provisions that impact foreign controlled corporations, non-US investment in US based real estate, and a lot of provisions related to the tax treatment of sales in REITs and other technical aspects of REITs.

However, the one that several of my wealthier clients may like to hear is that the ability to make charitable contributions from your retirement account, and treat it as your distribution for the year, has been made permanent.  This has been an on-again off-again law in recent years but it’s now permanent. If you want to take advantage of this you need to do so immediately!  The gifts must be made by December 31, 2015 to take advantage of the law for this year.  However, now that it’s permanent you can use it toward your 2016 mandatory distributions next week!  Of course, I always wonder what “permanent” means to the people who make the laws in Washington DC!?

Happy new year!



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