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 MoreCategory: Thursday Thoughts
No “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 MoreAsk a Trust Officer: Charitable IRA Giving
Dear Trust Officer: I’ve heard of something called a “charitable IRA rollover.” What is that? — Generous, but Prudent DEAR GENEROUS, BUT PRUDENT: If you are older than 70½, you are permitted to arrange for a tax-free transfer of up to $100,000 per year from your IRA to the charity of your choice. This is […]
Read MoreAn Inheritance Protection Plan
Estate planners and trust officers often hear the question: “How can I keep my money out of the hands of my child’s spouse?” There can be many motivations for this attitude—perhaps the son-in-law or daughter-in-law lacks financial maturity, or has a substance abuse problem, or the parent thinks that the marriage itself might not last. […]
Read MoreLike-kind Exchanges Changed
Internal Revenue Code Section 1031 provides that an exchange of things that are alike will not be taxable except to the extent that cash changes hands. The most important application of this provision has been in the area of exchanges of real estate, but it also has been applied in other contexts as well, such […]
Read MoreRetirement Plan Limits Bumped Up for 2019
To make it possible for voluntary retirement savings to keep up with inflation, the various numerical limits embedded within qualified retirement plans are indexed for inflation. The big news today is that the IRA contribution limit goes from $5,500 to $6,000, if the individual is younger than age 50 in 2019, and $7,000 if he […]
Read MoreAsk a Trust Officer: Marital trusts
DEAR TRUST OFFICER: Now that the federal estate tax exemption is over $10 million, do I still need a marital deduction trust in my will for my wife? — CONCERNED HUSBAND DEAR CONCERNED HUSBAND: Most likely, yes. If your current will includes a trust for a surviving spouse, you probably will want to keep it. […]
Read MoreAvoid Retirement Surprises
The latest news on retirement preparedness is not encouraging. An estimated 40% of households headed by people aged 55 through 70 are unlikely to have sufficient resources to maintain their standard of living, according to a Wall Street Journal analysis. The median 401(k) account balance for this group is just $135,000, which might be enough […]
Read MoreA New Kind of Long-Term Care Insurance
More than 400,000 long-term-care insurance policies were sold in 1992, according to figures published by The Wall Street Journal. These are the policies that help seniors cover the costs of nursing home stays at the end of life. At least 400,000 additional policies were purchased each year in the subsequent ten years, peaking at about […]
Read MoreWhat’s in a Sector?
The S&P 500 stocks may be divided into sectors, as follows: Energy Consumer Discretionary Consumer Staples Health Care Information Technology Financials Industrials Materials Communication Services Utilities Why is this important? Just as all stocks do not move in lockstep, each sector of the S&P 500 follows its own path. Some exhibit more growth characteristics; others […]
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