Are You Aware Decanting Causes Tax Issues?

Download Printable Article By Robert S. Keebler, CPA/PFS, MST, AEP (Distinguished), CGMA Decanting is the act of distributing the assets of an old trust to a new one with more favorable terms. It provides an easy, inexpensive method for correcting errors or ambiguities, adapting a trust to changes in a settlor’s objectives or changes in a beneficiary’s circumstances, taking advantage of new planning opportunities or adding flexibility to a trust. However, because trust decanting is a relatively new estate planning strategy, its tax consequences have not yet been clearly established. The IRS is considering ways to address these tax consequences…

Our Top 10 Best Articles on Tax & IRA Planning

As part of our December 2014 Newsletter, we are featuring a special “Best Of” issue.  Below, you will find a list of our Top 10 Articles on Tax and IRA Planning.  All of these articles were authored and written by Robert S. Keebler, CPA, PFS, MST, AEP (Distinguished), CGMA. Beneficiary Designation Problems with IRAs: More Than Just the RMD Rules! (with Kristen M. Lynch, J.D., AEP, CISP, CTFA) PLR Opens Door to Post-Death Exchanges of Non-Qualified Annuities Tax-Free! (with Michael E. Kitces, MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL) Frank Aragona Trust: What Now Constitutes Trustee “Material Participation”? Understanding…

2014 Year-End Tax Planning

By Robert S. Keebler, CPA/PFS, MST, AEP (Distinguished), CGMA As we near the end of 2014, year-end tax planning again takes center stage. In this article we summarize a number of strategies that may produce substantial tax savings with just some year-end tax planning. Making Trust Distributions The tax brackets for trusts are much more compressed compared to the brackets for individuals. This suggests, if the governing instrument allows it, that trustees should consider making discretionary distributions of income to beneficiaries at the end of 2014 to reduce tax rates. Harvesting Ordinary Income Harvesting ordinary income is another part of…

Year-End Gain Harvesting May Create Impressive Tax Savings, But Be Careful!

By Robert S. Keebler, CPA, MST, AEP (Distinguished) Bracket management has always been an important part of income tax planning. As we noted in our May newsletter, however, the 3.8% Medicare Surtax and higher tax rates make it even more important in 2013. We listed the following strategies that taxpayers can use to avoid the surtax and stay out of the higher tax brackets: (1) Income smoothing CRTs; (2) income shifting CRTs; (3) using NIMCRUTS as a substitute for or supplement to a retirement plan; (4) CLATs; (5) Life Insurance; (6) deferred annuities; (7) installment sales; (8) managing IRA distributions;…

Teleconference On 709 Preparation HUGE Success!

Earlier today, we had almost 100 people attend our popular educational program entitled, “The Ins & Outs of Correct 709 Prep“. It is very clear that this is an area that many estate planners want further guidance on how to properly plan and prepare the gift tax return. Here are what just a couple of people had to say about today’s program: “Very good session on a most-confusing area!” – D. Zanish, CPA “Excellent, as always!” – C. Boomgarden, CPA Still a popular area, we will be looking to put together another program with either further in-depth discussion on the…

Steve Oshins on ILM 201330033: Ruling on Gift and Estate Tax Consequences of Self-Cancelling Installment Notes

Steve Oshins on ILM 201330033: Ruling on Gift and Estate Tax Consequences of Self-Cancelling Installment Notes Thanks to generosity of Leimberg Information Services and nationally renowned estate planning attorney, Steven J. Oshins, J.D., AEP (Distinguished), we are pleased to provide to you a recently published article on LISI, which discusses two recent cases deciding issues facing same-sex married couples. “In this case, the value of the notes was based upon the §7520 tables. The decedent accounted for the self-cancellation mechanism by adjusting the principal to be repaid or the interest rate that applied to the principal. However, the IRS did…

Tax and Economic Implications of the DOMA Decision

By Robert S. Keebler, CPA, MST, AEP (Distinguished) Section 3 of the Defense of Marriage Act (DOMA) provided that in determining the meaning of any Act of Congress, the word “marriage” meant only the legal union between one man and one woman as husband and wife, and the word “spouse” refers only to a person of the opposite sex who is a husband or a wife. On June 26, 2013, the U.S. Supreme Court invalidated this section of the Act in United States v. Windsor. The decision has far reaching planning implications for married same-sex couples whose marriage is recognized under…

Tax Planning for 2013 Under the New Laws

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…

Paul Hood on Wandry v. Commissioner: A Significant Taxpayer Win in another Defined Value Case

Reproduced with Permission by and Courtesy of Leimberg Information Services, Inc. (LISI) and L. Paul Hood, Jr.. For information about how to subscribe to LISI, click here. “Congratulations to counsel to the taxpayers for a slam dunk taxpayer victory! You should read this opinion. It is an important extension of defined value gifts and proves that one doesn’t need a charitable or marital “wrapper” for these things to work properly as I have argued in published articles for almost ten years. In my opinion, the bottom line is that properly designed and implemented defined value transfers are more legitimate now…