By Robert S. Keebler, CPA, MST, AEP (Distinguished) As you probably know all too well, tax rates increase substantially in 2013 and later years for high income taxpayers. Not only did the top income tax rate increase from 35% to 39.6%, but a 3.8% Medicare surtax is now imposed on net investment income (NII). The 39.6% rate now applies to taxable income over $450,000 for married taxpayers and $400,000 for single taxpayers. In addition, net investment income is subject to a new 3.8% Medicare surtax to the extent modified adjusted gross income exceeds $250,000 for married taxpayers and $200,000 for…
New Private Letter Ruling Approves NING Trust
By William D. Lipkind, J.D., LL.M. (Taxation) & Steven J. Oshins, J.D., AEP (Distinguished) For many years, practitioners have used the so-called DING Trust to save substantial state income taxes for their clients. “DING Trust” is short for Delaware Incomplete Gift Non-Grantor Trust. It’s an irrevocable trust that the settlor sets up for the benefit of himself and other discretionary beneficiaries. Transfers to the trust are not completed gifts for gift tax purposes, yet the trust itself is the owner of the assets for income tax purposes. Because the trust pays the income taxes, a settlor who lives in a…
Insurance as the Key Ingredient of the “New” Estate Planning
Summary of a Live Presentation by Martin M. Shenkman, J.D., CPA, MBA, PFS®, AEP (Distinguished) Despite the American Taxpayer Relief Act of 2012 (“ATRA”), which has now made the federal estate tax exemption “permanent” at $5.25 million, your high net worth clients should still consider estate tax planning right now. The gift exemption is still $5 million and there is a good chance this may be reduced in the future. Plus, the combined estate (or gift) tax rate and generation-skipping transfer tax rate is now 64% (not factoring in “decoupled” states’ estate tax)! Those clients who may have deferred planning…