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New Tax Laws and YOU

Unless you live under a rock, deep in a cave, you have heard about the new tax act that Congress is putting together. This is not a political commentary on that act. More importantly a few things to remember: - With regards to estate tax very few people reading this need to worry about that element of the new tax act as it is set to bump the estate tax exemption from $5.45m to $10.9m. That is per person. So if you are a married couple with over $21.8m then your loved ones would still pay estate tax after your death. Also, it should be noted that the law sunsets so could go back to $5.45m per person or whatever else Congress feels like. However, for all practical concerns the estate tax is dead. - However, there are still income tax concerns after death as relates to the step-up in basis.
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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
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NEW IRS Form 8971 – BASIS reporting

HOT OFF THE PRESSES:  The Internal Revenue Service has released a draft of a new Form 8971 for reporting basis information in accordance with new IRC section 6035 for assets held by a decedent and reported on a federal estate tax return (Form 706) filed on or after August 1, 2015. The form says it is to be signed by the "executor" of the estate but I believe a "trustee" can sign also. In any event it is likely part of your fiduciary duty and you should talk to your accountant about this when you file a form 706 "estate tax return."  Also, remember that estate tax returns are to be filed within 9 months of death but you can ask for a 6 month extension if you file for it within the first 9 months. The li
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2016 Gift and Estate Tax Exemptions

The IRS recently released the tax adjustments for 2016. As our firm focuses on gift and estate tax planning I wanted to share the relevant numbers with you. The annual gift exemption remains at $14,000. As a reminder that is the amount each person can give away, each year, to any individual, and all without tax.  This can be given to relatives or friends. So, for example, if grandma and grandpa are worried that they will have an estate subject to estate tax at death they can write $14,000 checks to every child, every grandchild, etc.... In fact, grandma and grandpa can EACH write those checks so it's really $28,000 in total.  That is the total of all gifts for the year so it's not a bad idea to write your checks for just under $14,000 to allow for birthday and holiday gifts! The federa
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