The longest recorded human lifespan is 122 years, 164 days. The record is held by Jeanne Calment, who lived in Arles, France. Born in 1875, Jeanne reportedly had an encounter with Vincent Van Gogh at her uncle’s shop. When Jeanne was 90 years old, she had outlived her daughter and her grandson, and had no […]
Read MoreCategory: Tax Planning
Tax or Penalty?
When you owe money to the IRS, does it matter whether it is a tax or a penalty? That question was put to a bankruptcy court recently. John Chesteen filed for bankruptcy in June 2017. The IRS filed a proof of claim for $5,100 in taxes owed. The Service later amended the claim to add […]
Read MoreNotes on an Ultra-Millionaire Tax
Senator Elizabeth Warren, D-Mass, has proposed a dramatic shift of emphasis for the federal government’s focus in taxing “the rich.” Rather than looking to income, she wants an annual wealth tax, which would apply in addition to any other federal taxes due. A wealth tax is justified, according to Warren, because the share of wealth […]
Read MoreIRS Forgives Rollover Mistake
A man’s family noticed that he was mentally declining in 2016. It may have been the onset of dementia. In 2017, this man withdrew funds from his IRA, apparently intending to roll the money into a new IRA. However, due to his medical condition, the man never completed the rollover. This man’s grandson son was […]
Read MoreMulti-year Tax Planning
According to estimates, there will be 29 million more taxpayers using the standard deduction for the 2018 tax year than did in 2017. Usually, one who is relying on the standard deduction, can get away with fairly minimal tax planning—maximize contributions to qualified retirement plans, offset capital gains with capital losses, and so on. However, […]
Read MoreNo “Clawbacks”
Next year the amount exempt from the federal estate and gift tax will be $11.4 million per taxpayer. For a married couple, assuming that they both die next year, the exemption is doubled, to $22.8 million. This exemption is scheduled to fall roughly in half in 2026, unless Congress acts before then to make it […]
Read MoreA Tax Break for the Elderly
Many states offer some tax relief for their elderly citizens. There may be some generosity behind the offer, or it may be part of an attempt to compete with lower-tax states for retiree residents. That competition may heat up now that the state and local tax deduction is limited to $10,000. The tax relief takes […]
Read MoreSecond Thoughts on Adult Adoptions
A parent, who is still living, created an irrevocable trust before 1985 for his lineal descendants. The trust creation date was before the effective date of the current generation-skipping transfer tax, and so the trust is protected from that tax by the “grandfather” rule for pre-existing trusts. The trust will divide into three portions upon […]
Read MoreAre the Tax Cuts Working?
DEAR TRUST OFFICER: Are the tax cuts enacted last December having the hoped-for impact? How is the economy doing? — ETERNAL OPTIMIST DEAR ETERNAL OPTIMIST: Too soon to say, but we have a number of good portents. Gross Domestic Product was up 2.2% in the first quarter. In the last four years, the first quarter […]
Read MoreBattle Brews Over SALT
Several high-tax states, including California, New York, New Jersey, and Connecticut, are trying to establish a legislative work-around to the new $10,000 cap on the deduction for state and local taxes (SALT). The cap will only affect the highest-income taxpayers, who have long been the target for state tax increases. Nevertheless, these states apparently fear […]
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