In this podcast, Angel Nevis and Anu Joshi from our Family Wealth and Individual Tax Planning Group discuss the various options and factors to consider when selecting who will inherit your IRA. You may choose one, or some combination of, the following:
In March, the IRS issued proposed regulations that cover determining the amount of the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). The regs also coordinate the FDII and GILTI deduction with other tax provisions. Here’s an overview.
The Tax Cuts and Jobs Act (TCJA) established a “participation exemption system” under which certain earnings of a foreign corporation can be repatriated to a corporate U.S. shareholder without U.S. tax. (This occurs under Internal Revenue Code Section 245A.) (more…)
Recently, the IRS began pushing back on discounts used within estate and gift valuations, specifically the discount for lack of control (DLOC) and the discount for lack of marketability (DLOM), calling for lower discounts to be applied. Valuation discounts have always been critical in estate and gift valuations because they measure the restrictions on the ownership interest being valued. These discounts also can be used as a planning tool to help lower overall estate and gift taxes. As a result, the IRS reviews these discounts carefully and can push back on them. The DLOC is typically applied when the non-controlling interest is being valued and the DLOM is applied to account for the limited liquidity of the ownership interest. (more…)
Individual Retirement Accounts (IRAs) allow investments to grow tax-free over time and can be an effective way to pass wealth to future generations. Distributions from an IRA are subject to income tax in the year of withdrawal. Required minimum distributions (RMDs), which are calculated based on the value of your IRA and your life expectancy, must be taken when you reach age 70 ½. (more…)
Beginning in 2018, the Tax Cuts and Jobs Act (TCJA) effectively removed gift and estate tax liability concerns for many families. However, the favorable estate tax changes in the TCJA are currently scheduled to sunset after 2025, unless Congress takes further action. Notably, the TCJA provision that doubled the gift and estate tax exemption from $5 million to $10 million (adjusted annually for inflation) will revert to pre-2018 levels after 2025. (more…)
Obviously, qualified retirement plans such as 401(k) plans and IRAs are meant to provide retirement savings. However, if you’re fortunate and don’t have to draw heavily, if at all, on plan and IRA assets, you can preserve a tidy nest egg for your heirs.
In fact, if handled correctly, distributions can be stretched over the lifetimes of several generations. Thus, these vehicles become estate planning tools, as well as retirement planning tools. (more…)
The Tax Cuts and Jobs Act (TCJA) has reduced estate tax concerns for many families, but estate tax liability remains a concern for some. Notably, you may implement strategies in the wake of the TCJA that are designed to reduce future exposure to federal and state estate taxes.
One such option, a Crummey trust, remains a viable option. Despite its odd-sounding name, derived from the landmark case authorizing its use, the results are anything but crummy. (more…)