Trusts and Estates

Intentionally Defective Grantor Trusts

An Intentionally Defective Grantor Trust (IDGT) is commonly used as an effective tool for estate tax planning.

An IDGT is disregarded for income tax purposes, but it is a legally valid irrevocable trust for estate tax purposes.   Appreciating assets are usually transferred to an IDGT out of the grantor’s taxable estate.  Once the assets are transferred and owned by the IDGT, they are no longer a part of the grantor’s taxable estate.  Still the grantor of the IDGT retains some rights and reports the earnings from the IDGT’s assets on his/her personal tax return, while all of the investment income and appreciation remains within the IDGT.

IDGTs are complex in nature, but this article published by the CalCPA Education Foundation provides a very nice overview of how IDGTs work and can be beneficial for estate tax planning purposes.   To […]

By |July 28th, 2018|Categories: Individual Tax, Trusts and Estates|Comments Off on Intentionally Defective Grantor Trusts

2016 Tax Planning Guide

 

Our 2016/2017 Tax Planning Guide is now available. The election of a new President in addition to Republicans retaining control of Congress could result in significant changes in tax laws in the upcoming year.  Our online Tax Planning Guide will give you access to updated tax and financial planning information throughout the year as legislative changes are made. Feel free to forward it to friends and family who you think might find it interesting or helpful. We hope this guide will prove to be a convenient resource for you throughout the year.  Just a few of the topics covered in the guide are:

  • Changes to some business and individual tax filing deadlines effective in 2017
  • Tax planning for investments and net investment income tax
  • How […]

IRS Increases Interest Rates for First Time Since 2011

Effective as of the 2nd calendar quarter beginning April 1, 2016, the Internal Revenue Service has increased the interest rates by 1% for all non-corporate and corporate taxpayers.

For taxpayers other than corporations (individuals, trusts, etc.), the overpayment and underpayment rates have increased from 3% to 4%.

The corporate underpayment penalty has increased from 2% to 3% and the interest rate on corporate overpayments exceeding $10,000 has increased from 0.5% to 1.5%. The underpayment penalty for large corporations has also increased, from 5% to 6%.

These rate increases are due to the increase in federal short-term rates that took effect February 1, 2016.

California rates will remain unchanged throughout the 2nd quarter (June 30, 2016).

More details regarding the rate increase can be found on the IRS […]

By |May 16th, 2016|Categories: BCo Community News, Business Tax, Individual Tax, IRS, Trusts and Estates|Tags: , , , , |Comments Off on IRS Increases Interest Rates for First Time Since 2011

2015 Tax Planning Guide

New Year 2015 And Clock

 

Our 2015 Tax Planning Guide is now available. This online guide will give you access to updated tax and financial planning information throughout the year. Feel free to forward it to friends and family who you think might find it interesting or helpful. We hope this guide will prove to be a convenient resource for you throughout the year. Just a few of the topics covered in the guide are:

 

  • Roth IRA conversions
  • Bunching income and expenses as a year-end planning strategy
  • Planning for restricted stock and stock options
  • Planning for real estate investments
  • Succession and retirement planning for business owners
  • Charitable giving strategies

 

If you have any questions after reviewing the information presented, please do not hesitate to […]

2014 Tax Planning Guide

Our 2014 Tax Planning Guide is now available. This online guide will give you access to updated tax and financial planning information throughout the year. Feel free to forward it to friends and family who you think might find it interesting or helpful. We hope this guide will prove to be a convenient resource for you throughout the year. Just a few of the topics covered in the guide are:

 

  • Alternative minimum tax (AMT) triggers
  • Expired or expiring tax breaks
  • Capital gain tax
  • 3.8% Medicare tax on net investment income
  • 0.9% Medicare tax on earned income
  • Planning for restricted stock and stock options
  • Planning for real estate investments
  • Succession and retirement planning for business owners
  • Charitable giving strategies

 

If you have any questions after reviewing the […]