By Jeffrey M. Verdon, Esq., Travor Moses, Esq. & Fernando Goyco-Covas, Esq. Puerto Rico’s politicians have aimed to spur investment and economic activity in Puerto Rico by changing their tax code. These series of reforms, including the Individual Investors Act (Act 22-2012 and 138-2012), now mean that Puerto Rico offers the potential for exceptionally advantageous United States and Puerto Rican income tax exemptions which, as long as certain requirements are met within the United States Internal Revenue Code of 1986, as amended (the “IRC”),[i] can provide remarkable income tax relief to a wide universe of US citizens, residents, and even…
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…
“Green Book” Proposals and Income Tax Planning
By Robert S. Keebler, CPA, MST, AEP (Distinguished) On April 13, the Treasury Department issued its annual Revenue Raising Proposals, commonly referred to as the“Green Book”. In this column we will summarize the key income tax proposals and suggest some planning ideas. These proposals include: (1) Implementing the Buffett Rule by imposing a new “Fair Share Tax;” (2) Reducing the value of certain income tax deductions and exclusions; (3) Limiting the total amount a taxpayer can accrue in tax favored retirement plans; (4) Shortening the deferral period for inherited IRAs; and (5) Taxing carried interests as ordinary income. INCOME TAX…
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…
New Tax – Unearned Income Medicare Contribution Tax (UIMCT)
The Ultimate Estate Planner, Inc. is pleased to share with you a copy the article, “Tax Planning for the New 3.8-Percent Medicare Tax” by Robert S. Keebler, CPA, MST, AEP (Distinguished) found in the Family Tax Planning Forum that appeared in TAXES – The Tax Magazine®’s October 2012 edition. The Health Care and Education Reconciliation Act of 2010 created a 3.8% tax, referred to as an Unearned Income Medicare Contribution Tax (UIMCT), on certain passive investment income of individuals, trusts and estates scheduled to begin in 2013. The attached article provides an overview of the new tax, explains how it…
Healthcare Surtax Examples from Robert S. Keebler, CPA, MST, AEP (Distinguished)
In an effort to help fellow advisors better understand the 3.8% HealthCare Surtax, nationally renowned CPA, Robert S. Keebler, has issued the examples below to help you. John, single, has $100,000 of salary and $50,000 of net investment income. The 3.8% surtax would not apply (MAGI <$200,000). Mary, single has $225,000 of net investment income and no other income. The 3.8% surtax would apply to $25,000 of income (excess of $225,000 MAGI over $200,000 “threshold amount”). Terry and Tina, married filing jointly, have $300,000 of salaries and no other income. The 3.8% surtax would not apply (no net investment income)….
Leimberg Information Services: 60-Second Planner on President Obama’s Estate & Income Tax Proposal
Reproduced with Permission by and Courtesy of Leimberg Information Services, Inc. (LISI). For information about how to subscribe to LISI, click here. As mentioned previously by Robert S. Keebler in a previous blog entry, President Obama’s Fiscal Year 2013 budget was released on February 13th. Follow this link to get a full copy of the 2013 Budget. The Treasury’s Green Book containing general explanations of the Administration’s revenue proposals can be found here. We now wanted to share with you two Leimberg Information Services, Inc. 60-Second Planner podcasts in response to this budget. One podcast deals with the estate and…
U.S. Treasury Announces President Obama’s 2013 Budget and Proposed Estate Tax Law Changes
A special thank you to Robert Keebler of Keebler & Associates, LLP for the heads up that the U.S Treasury just released its FY2013 Greenbook, which provides an explanation of the Administration’s revenue proposals for Fiscal Year 2013. The Administration’s FY2013 budget proposes tax policy to boost growth, create jobs and improve opportunity for the middle class. In particular, as estate planning professionals, we are all extremely interested to see what is going to happen with the current Federal Estate Tax Exemption Amount, which is set to revert back to $1 million in 2013. According to this bill, the estate…