Estate & Trust Blog

Informing and Updating

Senate Tax Bill - 500 Card Monty – Try to find the quarter!

Congress often boasts that they enact taxes reduction. What they mean is that they reduce tax rates. Taxes are calculated as (i) taxable income (ii) multiplied by the tax rate. If rates are reduced but the calculation of taxable income is changed (i.e. deductions are reduced), well, actual tax paid can still go up. The Affordable Care Act (ACA) implemented a 3.8% “Net Investment Income Tax” to provide funds to pay for the US government’s support of the heath care insurance “individual mandate.” The Senate version of the 2017 tax legislation (again, the terms of the House and Senate bills need to be reconciled to form the final version of the law) effectively eliminates the individual man

Senate Tax Bill - Estate Tax, Part II – The only thing that is certain is that certainty

In Part I of this blog, we reviewed the effect of the Senate-passed estate tax law changes, and how the new law would reduce estate tax for about 2,700 estates per year. For eight years. The bill also provides that the increased estate tax exemption applies only for 2018-2025…after 8 years the 2017 law magically re-appears. How do taxpayers plan now? It would seem unwise to change any planning that addresses the current law since, well, we just don’t know! This blog is not intended to constitute, and does not constitute, legal advise to anyone or any specific situation. The content of these blogs is my view only. See also our legal notices.

Senate Tax Bill - Estate Tax, Part I – A Whole Lot o’ Nuttin’ (almost)

Although the Senate and House versions of the sweeping 2017 tax law changes need to be reconciled prior to sending the bill to the President’s desk, the Senate version of the 2017 tax legislation, approved last night by a 51-49 vote (Senator Corker of Tennessee the lone Republican to stand up to his party), increases the estate tax exemption (and also the Generation Skipping Tax exemption) from $5,490,000 per taxpayer to $10,000,000, starting in 2018, and then indexed for inflation. To the vast majority of Americans, this means nothing and may well have no effect on their estate planning. According to the Tax Policy Center, in 2017, 11,300 federal estate tax returns will be filed, and 5,500

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