estate tax – Eshcinsel http://eshcinsel.net/ Sun, 17 Apr 2022 16:04:43 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://eshcinsel.net/wp-content/uploads/2021/10/icon-41-120x120.png estate tax – Eshcinsel http://eshcinsel.net/ 32 32 Aksyon Demokratiko turns to PCGG to discuss Marcos’ unsettled property taxes https://eshcinsel.net/aksyon-demokratiko-turns-to-pcgg-to-discuss-marcos-unsettled-property-taxes/ Thu, 10 Mar 2022 07:53:38 +0000 https://eshcinsel.net/aksyon-demokratiko-turns-to-pcgg-to-discuss-marcos-unsettled-property-taxes/ Metro Manila (CNN Philippines, March 10) — Manila Mayor Isko Moreno’s political party is seeking clarification from the President’s Commission on Good Government on the status of the Marcos family’s ₱203 billion in unsettled property taxes. In a letter dated March 9, Aksyon Demokratiko President Ernesto Ramel asked PCGG President John Agbayani for clarification on […]]]>

Metro Manila (CNN Philippines, March 10) — Manila Mayor Isko Moreno’s political party is seeking clarification from the President’s Commission on Good Government on the status of the Marcos family’s ₱203 billion in unsettled property taxes.

In a letter dated March 9, Aksyon Demokratiko President Ernesto Ramel asked PCGG President John Agbayani for clarification on Atty’s previous statement. Vic Rodriguez that the commission has a settlement with the Bureau of Internal Revenue regarding the Marcos’ alleged debt. Rodriguez is the spokesperson for presidential candidate Ferdinand “Bongbong” Marcos.

“The question is very simple, can be answered with ‘Yes’ or ‘No’. Did the PCGG and BIR reach an agreement regarding Marcos’ P203 billion debt to the Filipino people?” his letter read.

Ramel said that if there is indeed an agreement, Agbayani must disclose the details which are considered a “matter of public interest”.

“If your answer is ‘No,’ then this is further proof that Marcos Jr.’s camp lied again as they always do about so many matters concerning their family, including their ill-gotten wealth,” Ramel pointed out. .

Rodriguez said earlier that properties related to the estate tax case “are still in dispute.”

He also affirmed that the BIR and the PCGG have agreed that the BIR will await a decision on the said matter “prior to any collection enforcement activities”.

READ: Isko’s party seeks to renew Marcoses claim to settle inheritance tax

Ramel said in his previous letter to BIR that even after the death of the late dictator Ferdinand Marcos Sr. in 1989, his widow Imelda, his only son Bongbong and his daughters Imee and Irene “did not file the tax return with the BIR as required by law, they also did not pay inheritance tax.”

Bongbong Marcos was convicted in 1995 for failing to file tax returns from 1982 to 1985 when he was governor and vice-governor of Ilocos Norte. But the Electoral Commission rejected the majority of petitions challenging his bid on his tax obligations, finding that failure to file tax returns is not a crime involving moral turpitude. At least five of the six dismissed cases are on appeal.

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St. Louis City Government Contributes $500,000 to Property Tax Relief Fund | Politics https://eshcinsel.net/st-louis-city-government-contributes-500000-to-property-tax-relief-fund-politics/ Thu, 10 Mar 2022 02:00:00 +0000 https://eshcinsel.net/st-louis-city-government-contributes-500000-to-property-tax-relief-fund-politics/ ST. LOUIS — A new fund aimed at paying delinquent property taxes before families lose their homes to tax foreclosure will get a $500,000 infusion from the city. St. Louis Mayor Tishaura O. Jones announced the contribution Wednesday, which comes from money aldermen appropriated last summer from the first round of federal funds from the […]]]>

ST. LOUIS — A new fund aimed at paying delinquent property taxes before families lose their homes to tax foreclosure will get a $500,000 infusion from the city.

St. Louis Mayor Tishaura O. Jones announced the contribution Wednesday, which comes from money aldermen appropriated last summer from the first round of federal funds from the American Rescue Plan Act.

the St. Louis Real Estate Tax Assistance Fund, or RETAF, was launched in November and is administered by community development group Park Central Development in partnership with the St. Louis Collector of Revenue’s Office, which initiates tax foreclosures. The group initially said it was looking to raise $300,000 in private donations.

Group officials estimate that around 50 families a year lose their homes to tax foreclosure, often for not paying a few thousand dollars. Backers say it contributes to neighborhood vacancy and loss of generational wealth.

People also read…

To be eligible for the fund, applicants must earn an income below the region’s median income — $59,000 for a one-person household — and have paid off their mortgage. The property must be the principal residence of the applicant.

Jones and St. Louis Collector Gregory FX Daly asked citizens to continue supporting the fund so it can continue to operate after the federal funds expire in 2026.

“A region is really only as strong as its urban core,” Daly said. “We hope that the city’s announcement of the $500,000 donation will inspire citizens across the region to join us in donating to RETAF.

Posted Wednesday, March 9 at noon.


St. Louis homeowners could get help paying overdue property taxes


Instead of


Offers abound at St. Louis tax sale, but many properties are ignored


The LRA owns the 12,000 properties in St. Louis that no one wants.  And he can't afford to maintain them.

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Illinois Department of Revenue Property Tax Relief for Seniors – Cardinal News https://eshcinsel.net/illinois-department-of-revenue-property-tax-relief-for-seniors-cardinal-news/ Sat, 19 Feb 2022 15:42:42 +0000 https://eshcinsel.net/illinois-department-of-revenue-property-tax-relief-for-seniors-cardinal-news/ Real Estate Tax Deferral Program for Seniors Old house to maintain (PHOTO CREDIT: LL Bartlett/pixabay). By Zeta Cross | The central square donor (The Center Square) — For seniors on fixed incomes, paying property taxes may be the only obstacle forcing them to move or sell their home. This is one of the reasons eligible […]]]>

Real Estate Tax Deferral Program for Seniors

Old house to maintain (PHOTO CREDIT: LL Bartlett/pixabay).

By Zeta Cross | The central square donor

(The Center Square) — For seniors on fixed incomes, paying property taxes may be the only obstacle forcing them to move or sell their home.

This is one of the reasons eligible Illinois seniors can apply for property tax relief through the Illinois Seniors’ Real Estate Tax Deferral Program. said Maura Kownacki of the Illinois Department of Revenue’s communications office.

“For seniors who need help, it’s a wonderful program,” Kownacki told The Center Square. “It’s financial security. It’s a great option to have.

The program allows eligible seniors to defer up to $5,000 per tax year, including first and second installments. It works like a loan with an interest rate of 6%. Full or partial payments are borrowed from the state. The state pays the municipality on behalf of the owner. A lien is placed on the house. If the house is sold or the owner dies, deferred taxes and interest are paid on the proceeds from the sale of the house.

The senior also has the option of repaying deferred taxes in advance.

Illinoisans on average pay the second highest property taxes in the nation.

The deadline to apply for the program is March 1. Kownacki advises anyone interested to visit www.tax.illinois.gov for more details.

County collector offices have staff who are ready to help people with the application.

To be eligible for the program, the senior must have reached the age of 65 before June 1, 2022 and must have owned the home for at least three years.

The borrower can request total or partial tax deferrals, not exceeding $5,000 per year. The borrower’s household income cannot exceed $55,000 per year. If the husband is 65 and his younger spouse is still working, their combined income cannot exceed $55,000.

To apply, borrowers cannot have an outstanding property tax balance. They must take out adequate home insurance against fire or damage.

Interested seniors are encouraged to call their county collector’s office to obtain an application. The application must be filed with the tax collector’s office by March 1 of each year they wish to defer their property taxes or special assessments.

The IDOR website www.tax.illinois.gov has more information.

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DE Bill Would Increase Senior Real Estate Tax Credit – WGMD https://eshcinsel.net/de-bill-would-increase-senior-real-estate-tax-credit-wgmd/ Fri, 04 Feb 2022 21:30:57 +0000 https://eshcinsel.net/de-bill-would-increase-senior-real-estate-tax-credit-wgmd/ A new bill pending action in the House of Representatives would nearly double the tax relief for Delaware senior homeowners. Currently, most First State seniors’ property owners can use the seniors’ real estate tax credit. The maximum credit amount is half of the recipient’s tax liability or $400 (whichever is less). The state reimburses local […]]]>

A new bill pending action in the House of Representatives would nearly double the tax relief for Delaware senior homeowners.

Currently, most First State seniors’ property owners can use the seniors’ real estate tax credit. The maximum credit amount is half of the recipient’s tax liability or $400 (whichever is less). The state reimburses local school districts for any revenue loss resulting from the credit.

Until 2017, the maximum property tax credit for seniors was $500. Faced with a large budget deficit that year, state legislators wrote into the budget a 20% ($100) appropriation cut. The cut has been included in every budget since, despite the strong rebound in state revenue.

Since the current fiscal year (fiscal year 2022) began on July 1, state revenue forecasts have jumped dramatically. In the past six months, the state’s nonpartisan Delaware Financial and Economic Advisory Council (DEFAC) has twice raised the state’s revenue forecast for the current and future fiscal years, boosting total revenue of $820 million.

The state was in a similar fiscal position last year, enacting a record operating budget of $4.771 billion (a 5.43% increase), a record capital budget of $1.35 billion (a 90% increase) and a separate Supplementary Supply Bill containing $221.1 million in “one-time expenditures.

“State revenue is up, and that’s not including the massive amount of relief money we’ve received from the federal government,” said state Rep. Kevin Hensley (R-Townsend, Odessa, Port Penn). “We have also smartly put money aside for bad weather and reserve accounts to take appropriate precautions for the future. Now, I believe the state has an obligation to share its good fortune with its citizens.

Recently introduced by Rep. Hensley, House Bill 287 increase the property tax credit for seniors to $750. “By virtue of their lifetime contributions, no group of citizens has collectively paid more taxes than our elders,” he said. “At a time when the state is teeming with cash, there is no excuse not to provide modest tax relief to our elderly population, many of whom now live on fixed incomes.”

Representative Hensley’s proposal joins another measure, House Bill 108, seeking to make a significant change to the property tax credit for seniors. This latest bill, sponsored by State Rep. Mike Ramone (R-Pike Creek South), would restore the senior property tax credit to its pre-2017 maximum of $500. A tax memo completed last year reveals the bill would bring more than $4.2 million a year to eligible Delaware seniors.

The analysis of the amount of money that will be withheld by taxpayers under Rep. Hensley’s bill is not yet complete.

Both measures are pending action in the House Administration Committee.


first-class heating-air conditioning

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Glen Osborne officials cut property taxes by about 6% https://eshcinsel.net/glen-osborne-officials-cut-property-taxes-by-about-6/ Tue, 18 Jan 2022 14:00:00 +0000 https://eshcinsel.net/glen-osborne-officials-cut-property-taxes-by-about-6/ Glen Osborne officials were able to give homeowners a little real estate tax relief this year. Council recently passed its 2022 budget, maintaining all services and lowering the mileage rate from 5.2 to 4.9 mills, a reduction of 5.8%. The decrease will save taxpayers about $30 for every $100,000 of estimated property value, said Holly […]]]>

Glen Osborne officials were able to give homeowners a little real estate tax relief this year.

Council recently passed its 2022 budget, maintaining all services and lowering the mileage rate from 5.2 to 4.9 mills, a reduction of 5.8%.

The decrease will save taxpayers about $30 for every $100,000 of estimated property value, said Holly Merriman, councilor and president of finance.

For a home valued at $350,000, the tax savings would be approximately $105.

“The borough is on solid footing financially and we are continually looking for efficiencies,” Merriman said. “In addition to having a balanced budget, we are able to meet unexpected expenses as they arise. Council is always looking for ways to improve safety and livability in the borough.

Projected income and expenses were balanced at $662,272.

Revenues included $359,000 in property taxes, $185,000 in taxes on earned income, $49,500 in real estate transfer taxes, $13,000 in regional district tax distribution of assets, $5,000 in building permits and 3 $500 reimbursement for Quaker Valley School District Patrollers.

Expenditures include approximately $248,000 for public works, including $90,000 for road maintenance, $81,400 for sanitation and $31,500 for snow removal, $185,000 for administration, $127,000 for police, $41,400 for fire protection, $12,600 for borough beautification and $8,000 for code enforcement.

Among the reasons the borough was able to cut taxes is that there are no major capital projects planned, said council chairman Tom Huddleston.

“We are fortunate to complete a number of capital projects, and we are blessed,” Huddleston said. “We run a pretty good borough, so we’ve rewarded the citizens here. We do a very good job managing the limited funds we have.

The borough had spent nearly $500,000 to redesign and install a new stormwater management system and repave Sycamore Road. This project was completed in October.

Huddleston said the borough had to save for several years to complete this major repair project.

He also noted that covid had minimal impact on the borough’s finances and that people had paid their taxes on time last year.

Residents should expect to see community improvements as the months pass.

Authorities are looking to improve pedestrian crossings across the city, as well as repaint faded road lines and add signage.

There will be other plantings around the borough and other beautification efforts.

“I couldn’t be more proud of the council, the mayor and the borough for allowing this to happen,” Huddleston said. “It’s a very well run machine and we all get along well. It is always in the interest of the borough that we manage Glen Osborne.

Along with the budget, council recently approved a new five-year garbage collection contract with Waste Management.

The deal goes through the Quaker Valley Council of Governments. Garbage collection dates do not change.

Collection of hazardous waste, such as paints, is an additional service under the agreement. Residents can make an appointment for pick-up of hard-to-dispose items.

Glen Osborne garbage fees are incorporated into taxes.

A letter was sent to residents by the council chair this month announcing the budget and tax news.

In it, Huddleston encouraged residents to come to council meetings.

They are scheduled for 7:30 p.m. on the third Tuesday of the month at Osborne Elementary School.

“This is our community, so let’s come together to make it the best it can be,” the letter read.

Michael DiVittorio is a staff writer for Tribune-Review. You can contact Michael at 412-871-2367, mdivittorio@triblive.com or via Twitter .

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What property tax changes are planned in Germany? https://eshcinsel.net/what-property-tax-changes-are-planned-in-germany/ Thu, 13 Jan 2022 11:53:22 +0000 https://eshcinsel.net/what-property-tax-changes-are-planned-in-germany/ Every week, Mansion Global poses a tax question to real estate tax lawyers. Here is this week’s question. Q. I understand that Germany may soon be making some changes to property taxes. Can you explain what it is? A. With the leadership change in Germany in December, several changes in property taxation are on the […]]]>


Every week, Mansion Global poses a tax question to real estate tax lawyers. Here is this week’s question.

Q. I understand that Germany may soon be making some changes to property taxes. Can you explain what it is?

A. With the leadership change in Germany in December, several changes in property taxation are on the table, according to Roland Bomhard, partner at Düsseldorf-based law firm Hogan Lovells International. These initiatives were outlined in the new government’s coalition agreement last month and are expected to be rolled out over the next four years.

For starters, government officials are looking to change the way real estate transfer tax (RETT) is charged. Currently, RETTs range from around 3.5% to 6.5% nationwide, Bomhard said, and there are plans to create a reduced rate to make buying a home more affordable for people. young families.

Following: Will Vancouver property taxes go up in 2022?

“Germany is a country of tenants – around 60% of all properties are not owned but rented, and in the big cities the rate is even higher, in Berlin for example it is 82%,” said he explained. “It’s very, very difficult to get into the real estate market… so what the government is saying is ‘let’s lower the rate of property transfer taxes for young families or first-time buyers…[to] increase the pool of owners because it’s good for the economy.

The new rate is still under consideration, and some want to eliminate the tax altogether, Bomhard said. In order to finance a more affordable rate, the government is also seeking to adjust the taxation of transactions by institutional real estate investors.

Currently, an investor can sell up to 89.9% in a real estate holding company without triggering real estate transfer taxes, the lawyer explained.

“Only if you sell 90% or more do you trigger a real estate transfer tax,” he continued.


The government wants to make real estate investment in holding companies less attractive and increase the collection of taxes on real estate transactions. As a result, officials are seeking to reduce the percentage of shares an investor can sell in a real estate holding company without paying tax from 89.9% to 75%, according to Bomhard.

German homeowners can also expect a nationwide revaluation of property values ​​in 2022. This includes 36 million properties, the lawyer said.

“What the tax services want is to redefine the property tax that each owner pays,” he explained. “There should be no increase in overall tax revenue. This should just be a change in structure…and again, each state has the right to implement its own structure.

Following: Which US cities will have property tax increases in 2022?

Still, property values ​​in Germany have increased over the past two years, so many people will see an increase in their assessments, especially in larger cities. Multi-family buildings dating from the 1920s, 1930s and 1950s may be at a particular disadvantage, Bomhard said. These properties currently have a relatively low tax value, and this is likely to increase.

Owners will be required to submit a form outlining the type of property they own and its amenities by October 2022, and some follow-up visits may be required. The reassessment process is expected to take two years after the forms are submitted, and the new tax structure will take effect in 2025.

Email your questions to editors@mansionglobal.com. Check for answers weekly at mansionglobal.com.

Click to read tax experts share answers and advice for readers’ pressing tax questions

]]> Popular Again: Using Life Insurance Trusts to Protect Against Estate Taxes | Rivkin Radler LLP https://eshcinsel.net/popular-again-using-life-insurance-trusts-to-protect-against-estate-taxes-rivkin-radler-llp/ Mon, 10 Jan 2022 18:28:14 +0000 https://eshcinsel.net/popular-again-using-life-insurance-trusts-to-protect-against-estate-taxes-rivkin-radler-llp/ Lloyd Harbor Life – January 2022 With the prospect of lower estate tax exemptions and higher inheritance tax rates, now is a good time to consider using life insurance as cover against any inheritance tax. One way to do this is to add an irrevocable life insurance trust (ILIT) to your estate plan. Life insurance […]]]>

Lloyd Harbor Life – January 2022

With the prospect of lower estate tax exemptions and higher inheritance tax rates, now is a good time to consider using life insurance as cover against any inheritance tax. One way to do this is to add an irrevocable life insurance trust (ILIT) to your estate plan.

Life insurance proceeds are included in the deceased’s estate for estate tax purposes (assuming the deceased owned the policy). If the proceeds are payable to a spouse or charity, a deduction equal to the proceeds is permitted, so that no estate tax will be payable on the proceeds. However, if the proceeds are payable to someone else, they will be subject to estate tax if the assets of the estate, including the proceeds, exceed the estate tax exemption amounts. . While estate tax exemption amounts are currently high – the federal exemption for 2022 is $12.06 million and the New York State exemption is $6.02 million. dollars, there is a strong possibility that exemption amounts will be reduced and tax rates increased.

An easy way to keep life insurance proceeds out of your estate is to have an ILIT policy owner. You create the ILIT; ILIT beneficiaries and conditions, in general, can be whoever and whatever you want. The trust is irrevocable. If the financing of the ILIT is done correctly and that certain administrative provisions are respected, the proceeds of the life insurance will not be taxable on your death.

Life insurance is purchased for many reasons, including to protect loved ones, to pay inheritance taxes, and to equalize bequests to children (for example, a child gets the $5 million business and the another receives $5 million in life insurance proceeds). If you’re single, have a $5 million business, and $5 million in life insurance that you own individually, your estate tax bill is calculated on $10 million, subjecting your estate to tax. New York estate tax in 2021 on $4.07 million (resulting in over $1 million in New York estate taxes). If the life insurance had been held in an ILIT, your New York tax bill would have been calculated at $5 million, resulting in a $0 New York estate tax in 2021, allowing your heirs to save more than a million dollars. If inheritance tax exemptions are decreasing, the use of an ILIT is even more compelling.

ILITs have technical rules that your estate planning lawyer can explain to you. Using an ILIT is a simple way to protect your family and reduce your tax burden during these uncertain times.

This article first appeared in the January 2022 issue of Lloyd Harbor life.

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Do you have a plan to protect your inheritance from property taxes? – Family and matrimonial https://eshcinsel.net/do-you-have-a-plan-to-protect-your-inheritance-from-property-taxes-family-and-matrimonial/ Wed, 01 Dec 2021 23:56:12 +0000 https://eshcinsel.net/do-you-have-a-plan-to-protect-your-inheritance-from-property-taxes-family-and-matrimonial/ Goodsill Anderson Quinn & Stifel United States: Do you have a plan to protect your inheritance from property taxes? 01 December 2021 Goodsill Anderson Quinn & Stifel To print this article, simply register or connect to Mondaq.com. When you create an estate plan, you help ensure that the people you care about inherit your assets […]]]>


United States: Do you have a plan to protect your inheritance from property taxes?

To print this article, simply register or connect to Mondaq.com.

When you create an estate plan, you help ensure that the people you care about inherit your assets when you die. Careful planning can maximize the resources you leave to others and minimize the liability for your estate or its beneficiary.

Many people planning their estates in Hawaii could lose a substantial portion of their intended inheritance to estate taxes. Inheritance taxes apply to the value of property someone leaves behind upon death and can reduce what beneficiaries ultimately receive because the executor must pay these taxes before distributing any property.

Have you thought about how inheritance taxes might affect your loved ones after your death?

You may need to worry about state and federal property taxes

Hawaii is one of the few states to impose its own inheritance tax. Once the total value of your estate reaches $ 5.5 million, it is subject to state property taxes. The maximum rate of property taxes in Hawaii is 20% of the value of the estate, in addition to any federal estate tax.

If your estate is large enough to pay federal property taxes, you could lose more than half of its value in taxes alone. Currently, your estate must be worth more than $ 11.7 million to trigger federal property taxes. Qualifying estates stand to lose a lot without careful planning, as the federal estate tax has a maximum tax rate of 40%. The higher the value of your estate, the higher the tax rate that applies to it.

How do you plan for property taxes?

Those who own businesses or real estate are at a higher than average risk of triggering inheritance taxes after they die. There are many ways people can plan ahead and minimize these taxes.

Strategic gifts to family members can be one approach. Another method is to transfer large assets to a trust so that they are not technically part of your estate. Proper succession planning for your business or updated title documents for your home could reduce your risk of estate taxes affecting your inheritance.

Learning more about the challenges of high asset succession going through the Hawaiian probate process can help you plan to maximize what you leave for the people you love.

Originally posted Nov 12, 2021

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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Hey President Biden – What Are You Doing About Estate Taxes? https://eshcinsel.net/hey-president-biden-what-are-you-doing-about-estate-taxes/ https://eshcinsel.net/hey-president-biden-what-are-you-doing-about-estate-taxes/#respond Fri, 29 Oct 2021 01:26:55 +0000 https://eshcinsel.net/hey-president-biden-what-are-you-doing-about-estate-taxes/ WASHINGTON, DC – SEPTEMBER 09: US President Joe Biden talks about the fight against the coronavirus … [+] pandemic in the White House State Dining Room on September 9, 2021 in Washington, DC. As the Delta variant continues to spread in the United States, Biden outlined his administration’s six-point plan, including the requirement that all […]]]>


Let’s dance the 2 step!

Tax advisers and wealthy Americans have worked hard to place stakes in LLCs and other entities holding their investments in specially crafted irrevocable trusts, in the form of gifts or in exchange for promissory notes, in order to have arrangements well in advance of the signing of a new inheritance tax law that may prevent, or significantly reduce, the benefits associated with it.

Bernie Sanders Bill and September 13e The House Ways and Means Committee bills would have significantly reduced inheritance and gift tax exemptions by $ 11,700,000 per person, as well as the most popular and popular inheritance tax techniques. the most effective, but would have acquired vested interests in what is completed before the signing of these proposed new laws.

For many of us it was starting to feel like loading people onto life rafts on the Titanic, as there were a lot more families and assets than there were resources, like lawyers and hours in the day, given the thousands of Americans whose families would be subject to a 40% federal estate tax if they didn’t act quickly enough.

The situation was exacerbated by the rise in the stock market and the surge in real estate values.

The main threats have been the reduction of the inheritance tax exemption from $ 11.7 million to about $ 6 million next year, the inability to make transfers to a trust that would not be taken into account. account for income tax purposes and inability to assess partial or non-voting ownership. participations in LLCs and other entities at reduced prices.

Just a day or two ago, many expected there to be a tax on billionaires instead, but maybe billionaires contacted their senators and congressmen (“their” as well. meaning Senators and Congressmen where they live as opposed to ownership, but I don’t know which is which), which leads us to think that a uniform haircut for all taxpayers over 6 million dollars per person could be expected.

Then, as time seemed to be running out and we eagerly waited to see what President Biden would say today, and in particular, whether he would get 50 senators to cooperate with one of the inheritance tax exemption laws , we heard… …………… nothing.

President Biden did not mention inheritance taxes, so thousands of tax professionals and families were unsure whether or not to breathe, or perhaps breathe easier, but not as easily as it is. hoped, but we can breathe easier now because a “Build The Back Better Framework” document was released by the White House briefing room, providing a few pages of summary documentation on the tax increases that didn’t include none of the previously proposed changes to the federal estate tax rules described above, or the other proposed changes that would have removed with annuity trusts retained by grantors, certain master charitable annuity trusts, personal residence trusts qualified and tax-free exchange of assets between grantors and the trusts they have established. Limited Access Spousal Trusts (“SLAT”) have become a household word and will continue to be very popular (see Forbes blog Inheritance Tax Law Changes – What to Do Now, September 14, 2021).

That’s not to say it can’t be introduced later, but for now it’s at least unexpected.

Many families have used what is known as the “Biden 2-Step,” making a relatively small donation to an irrevocable trust, then selling an LLC or other interest to the trust in exchange for a note to the trust. long term order at low interest rate. This was step 1. Step 2 would be to cancel the note immediately before the adoption of a reduction in the balance of the inheritance tax exemption, or whenever the donor was prepared to do so. to do. Now step 2 may not have to happen, and the donor can keep the note, and a higher degree of personal financial stability having future growth in value outside of his estate, while he pays the income tax earned by the trust and receive small tax-free interest payments from the trust.

So there are now thousands of wealthy family trust schemes in place, or in the process of being put in place, that will still be needed when the inheritance tax exemption is reduced to half of the level otherwise applicable in 2026. , or before that, or when their active values ​​exceed the limits, even if they do not go down.

Instead, we have new Medicare high income taxes that use S corporations and partnering entities to protect themselves from this 3.8% tax, a surtax on people with income over $ 400,000 per year. year, reduced loopholes available to businesses and individuals who use foreign companies to avoid or defer income, and limitations on write-offs of business losses, to name a few.

The latest version of the Build Back Better Act was released today by the House Ways and Means Committee, and all 1,684 pages of it can be viewed by clicking here.

I will be discussing the above situation and other issues with Brandon Ketron during a free live webinar on Saturday, October 30.eat 11:00 a.m. EDT, and we’ll answer questions from the public at that time. You can send an email to info@gassmanpa.com for a free invitation and a proofread link.

Thank you to all readers who have asked us great questions about estate and gift tax planning. I can now schedule vacations with Marcia and the dogs, to be canceled if the flavor of the day becomes another increase in inheritance tax.

Thanks to Brandon Ketron, CPA, JD, LL.M for his contribution to this position.


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Intentionally Flawed Grantor Trust: Income Tax Problems Wendel Rosen LLP https://eshcinsel.net/intentionally-flawed-grantor-trust-income-tax-problems-wendel-rosen-llp/ https://eshcinsel.net/intentionally-flawed-grantor-trust-income-tax-problems-wendel-rosen-llp/#respond Mon, 18 Oct 2021 17:35:32 +0000 https://eshcinsel.net/intentionally-flawed-grantor-trust-income-tax-problems-wendel-rosen-llp/ An intentionally defective transferor trust (“IDGT”) can be beneficial for estate transfer and lower inheritance taxes. With an asset transfer to an IDGT, the settlor effectively removes these assets from the settlor’s estate while retaining income tax for the income generated by those assets. By including certain powers in the trust (called “assignor powers”), the […]]]>


An intentionally defective transferor trust (“IDGT”) can be beneficial for estate transfer and lower inheritance taxes. With an asset transfer to an IDGT, the settlor effectively removes these assets from the settlor’s estate while retaining income tax for the income generated by those assets. By including certain powers in the trust (called “assignor powers”), the settlor is treated as the owner of the assets of the trust for income tax purposes and the income of the trust is taxed to the assignor as it is. he received the trust income directly (Section 671). The trust is called “intentionally defective” because the settlor relinquishes ownership of the assets for estate tax purposes, but retains ownership of the trust for income tax purposes. The main advantage of the transferor trust status is that the trust assets can continue to appreciate without being depleted by income tax payments, which is equivalent to an additional transfer of wealth to the beneficiaries of the trust who is not subject to transfer tax (Rev. 64).

The following is a discussion of various tax issues related to transfers of assets to an IDGT:

Will the transfer of encumbered assets result in a taxable gain?
The assignor’s trustor status offers an additional advantage when the assignors intend to transfer debt-encumbered assets to the trust. A transfer of encumbered assets could result in the realization of a taxable gain if the amount of the debt exceeds the assignor’s base in assets (IRC 1001). This raises concerns that the transfer of encumbered assets could be a tax event for the grantor. However, due to an IDGT’s assignor status, the settlor remains the owner of the trust assets for income tax purposes, and there will be no realization of gain on the transfer of the encumbered assets. .

Can income tax be transferred to the trust?
IDGTs can also be written to retain flexibility for the trust to pay its own income tax in the future. To provide such flexibility, and to allow for any future occasion in which the burden on the settlor to pay income tax outweighs the above benefits, the trust may include conditions that allow for disabling or disabling. “Deactivate” the settlor’s trust status. Exercising this “tipping power” transfers income tax from the settlor to the trust itself. Depending on the nature of the settlor’s powers, the settlor or a protector of the trust may exercise the power to switch under the trust to relieve the settlor of the settlor’s powers, and the trust immediately changes status to a non-settlor trust. However, the termination of the transferor trust status could be a tax realization event with respect to the initial transfer of the encumbered assets mentioned above. If the charge is a recourse, i.e. the debt holder retains the right to sue the grantor directly, there would be no taxable event for the grantor when the assets are transferred to the trust or at the time of the subsequent change of the statute of the settlor of the trust to a non-confidence of the grantor.

Can the settlor be reimbursed for income taxes paid?
Although the settlor cannot transfer the responsibility for income tax to the trust without losing the status of transferor trust, the settlor can be reimbursed by the trust for the income tax paid. Trust conditions may be included to allow the trustee to reimburse the grantor for income taxes paid at the discretion of the trustee.

Note that the IRS has ruled that if repayments are mandatory, or if there is evidence of agreement or collusion between the settlor and the trustee, the settlor has effectively retained the right to use the trust property for fulfill its own obligation to pay income tax, i.e. the full value of the trust assets must be included in the settlor’s estate (IRC 2036). Conversely, where the repayment is discretionary rather than mandatory and there is no discussion of the repayment between the settlor and the trustee, the assets of the trust are not included in the settlor’s estate due to the settlement. discretionary tax refund clause.

IDGTs are complex and must be carefully drafted and implemented. Wendel Rosen’s trust and estate lawyers can help you establish an IDGT that works in tandem with your estate planning goals.

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