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Congress May be Changing Your Retirement Plan

Congress may actually be passing legislation. In May 2019, the House of Representatives passed, by a 417-3 margin, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The Senate has not yet voted on a similar bill, the Retirement Enhancement and Savings Act (RESA). If the House and Senate reconcile and pass the bill and the President signs it, I'm proposing a new name (WTFGSD) When They Finally Got…

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Stand Alone Retirement Plan Trust

We generally recommend our clients name their spouse or children as beneficiaries of their retirement plans (IRA, 401k, 403b, 457, etc.). We do not recommend that our clients name their living trust as beneficiary of their retirement plans because, in most cases, a living trust will not qualify as a designated beneficiary. If your living trust does not qualify, then your beneficiary will have to distribute the retirement funds out within five…

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2015 Estate and Gift Tax Exemptions

The 2015 estate and gift tax exemption will be $5,430,000 per person, or $10,860,000 for a married couple. (In 2014, it was $5,340,000 per person.) You won't have to worry about an estate tax unless your estate value is greater than $5,430,000 if you are single or $10,860,000 if you are married. The 2015 estate tax rate will stay at 40% for estates in excess of the exemption. The 2015 annual gift…

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Don’t Sell Your Parent’s House – Yet

If you have an elderly parent who is moving to a nursing home or who needs to downsize, think carefully before you advise her to sell her home. If she has owned her house for a long time, she most likely purchased it for a very low price. If she sells it now, she will have to pay a capital gains tax on the sale price minus the purchase price. That could…

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New Tax Law – Game Changer

The American Tax Payer Relief Act (ATRA), enacted into law on January 2, 2013, is a game changer for estate planning. The experts are just now sorting out how much of a game changer it really is. The new law significantly increased the the estate tax exclusion amount. The estate tax exclusion amount is the amount each US person could die with before the 40% estate tax kicks in. During the last decade,…

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Get Your Portability

The American Taxpayer Relief Act (ATRA) made "portability" permanent - well, as permanent as anything can be while Congress is still in session. Under the new law, the applicable exclusion amount for estate tax, gift tax and generation skipping tax is $5,000,000, indexed for inflation. This is the amount you can die with or the total amount you can gift during your lifetime without an estate tax or a gift tax. The…

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What You Want in Your Living Trust

The estate and gift tax was changed in a big way by the American Taxpayer Relief Act of 2012 (ATRA). The applicable exclusion amount, the amount you could gift during your lifetime and the amount you could die with before estate taxes, has been a moving target the last two decades. ATRA made the applicable exclusion amount "permanent." "Permanent" at least until Congress votes to change it. The new applicable exclusion amount…

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2013 California Tax Law Changes

Not only did the federal tax laws change in 2013, but so did the California tax laws. Ah, the golden state, where all that glimmers turns to taxes. Unlike at the federal level, where our elected officials chose to increase the income and capital gains tax rates, here in my home state, the people chose to increase their taxes - or at least other people's taxes -  by passing Proposition 30. Income…

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2013 Federal Tax Law Changes

We are living in a new era of taxes. Or to paraphrase the ancient Chinese curse, we are living in interesting times. On January 1, 2013, Congress passed and President Obama signed the American Taxpayer Relief Act of 2012 - not to be confused with the Kyrgyzstan Taxpayer Relief Act of 2012. Estate and Gift Tax. The estate and gift tax exclusion is now $5,000,000, indexed each year for inflation, so for 2013 it's…

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