Leave a philanthropic legacy with a charitable remainder trust
Posted October 16, 2019 / No comments
Let’s say you’re charitably inclined but have concerns about maintaining a sufficient amount of income to meet your current needs. The good news is that there’s a trust for that: a charitable remainder trust (CRT). This type of trust allows you to support your favorite charity while potentially boosting cash flow, shrinking the size of
Read MoreUse a Coverdell ESA to help pay college, elementary and secondary school costs
Posted October 15, 2019 / No comments
There are several ways to save for your child’s or grandchild’s education, including with a Coverdell Education Savings Account (ESA). Although for federal tax purposes there’s no upfront deduction for contributions made to an ESA, the earnings on the contributions grow tax-free. In addition, no tax is due when the funds in the account are
Read MoreWatch out for tax-related scams
Posted October 8, 2019 / No comments
“Thousands of people have lost millions of dollars and their personal information to tax scams,” according to the IRS. Criminals can contact victims through regular mail, telephone calls and email messages. Here are just two of the scams the tax agency has seen in recent months. Fake property liens. A tax bill is sent
Read MoreIs a self-directed IRA right for you?
Posted October 3, 2019 / No comments
Traditional and Roth IRAs can be powerful estate planning tools. With a “self-directed” IRA, you may be able to amp up the benefits of these tools by enabling them to hold nontraditional investments that offer potentially greater returns. However, self-directed IRAs present pitfalls that can lead to unfavorable tax consequences. Consequently, you need to handle
Read MoreTake advantage of the gift tax exclusion rules
Posted October 1, 2019 / No comments
As we head toward the gift-giving season, you may be considering giving gifts of cash or securities to your loved ones. Taxpayers can transfer substantial amounts free of gift taxes to their children and others each year through the use of the annual federal gift tax exclusion. The amount is adjusted for inflation annually. For
Read MoreSec. 6166: Estate tax relief for family businesses
Posted September 26, 2019 / No comments
Fewer people currently are subject to transfer taxes than ever before. But gift, estate and generation-skipping transfer (GST) taxes continue to place a burden on families with significant amounts of wealth tied up in illiquid closely held businesses, including farms. Fortunately, Internal Revenue Code Section 6166 provides some relief, allowing the estates of family
Read MoreWhen is tax due on Series EE savings bonds?
Posted September 24, 2019 / No comments
You may have Series EE savings bonds that were bought many years ago. Perhaps you store them in a file cabinet or safe deposit box and rarely think about them. You may wonder how the interest you earn on EE bonds is taxed. And if they reach final maturity, you may need to take action
Read More5 ways to withdraw cash from your corporation while avoiding dividend treatment
Posted September 23, 2019 / No comments
Do you want to withdraw cash from your closely held corporation at a low tax cost? The easiest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient, since it’s taxable to you to the extent of your corporation’s “earnings and profits.” But it’s not deductible by the corporation. Different approaches
Read MoreHow to treat your business website costs for tax purposes
Posted September 23, 2019 / No comments
These days, most businesses need a website to remain competitive. It’s an easy decision to set one up and maintain it. But determining the proper tax treatment for the costs involved in developing a website isn’t so easy. That’s because the IRS hasn’t released any official guidance on these costs yet. Consequently, you must apply
Read MoreThe Crummey trust: Still relevant after all these years
Posted September 20, 2019 / No comments
Traditionally, trusts used in estate planning contain “Crummey” withdrawal powers to ensure that contributions qualify for the annual gift tax exclusion. Today, the exclusion allows you to give up to $15,000 per year ($30,000 for married couples) to any number of recipients. Now that the gift and estate tax exemption has reached an inflation-adjusted $11.4
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