Vacation homes are typically treasured by families and often pass down from generation to generation. But there may be more to transferring the family lake cottage or beach house than first meets the eye. If you plunge ahead without careful planning, it could disrupt harmony and lead to a “family feud.” In some cases, relationships may be severed forever. (more…)
The Tax Cuts and Jobs Act (TCJA), which generally went into effect at the beginning of 2018, lowers individual and corporate tax rates, reduces or eliminates many deductions and enhances other tax breaks. One thing the new law doesn’t do is repeal the federal estate tax. But the TCJA does include other provisions that can impact your estate plan. (more…)
Qualified personal residence trusts (QPRTs) are an estate planning technique that can provide both tax and non-tax benefits to certain taxpayers looking to gift a principal residence, second home, or vacation home slowly over a number of years using a discounted gift value. However, before entering into a QPRT, you should consider the advantages and disadvantages in order to determine if it is right for you. (more…)
By Chris Bitter, Senior Valuation Analyst and Jeff Faust, Director of Valuation Services
Taxpayers are still awaiting new tax regulation changes that may affect the valuation of family-owned entities. In April 2015, Cathy Hughes, from the Treasury’s Office of Tax Policy, announced that the Treasury would amend regulations under IRS Code §2704 around mid-September. However, the Treasury has yet to release any new regulations limiting the applicability of valuation discounts on family-owned entities. Much speculation has arisen as to what the new regulations will look like. In November 2015, senior IRS official Leslie Finlow stated “Guidance on restrictions on estate valuation discounts for certain corporations and partnerships is expected very soon and won’t be based on previous administration proposals. (more…)
Trusts are a fundamental part of most estate plans — do you have one? Do you need one? If you do have one, do its provisions create even more trusts at your death? And if so, are they still a good idea?
Most everyone with assets will benefit by holding those assets in a revocable trust, commonly known as a living trust. Living trusts allow your heirs to transfer your assets after your death according to your wishes as outlined in the trust document, without the need for probate court oversight and approval. As the name implies, a revocable trust can be changed or completely revoked at any time before your death. It will also maintain your privacy at your death, whereas probate court proceedings are public information.
Upcoming tax regulation changes may have sweeping effects on how family-owned entities are valued.
Initially, the IRS did not allow discounts for lack of control in valuing family-owned interests. In 1993, the IRS ruled that these interests were not collective and therefore lifted the limitation for this discount. However, there are still some situations where discounts for lack of marketability and lack of control are challenged on the basis of IRS Code §2704.
It’s healthy to take care of yourself every once and a while. I have two young children at home and sometimes, although it’s hard for me to admit, I have to make a conscious decision to do something for myself instead of always for them. In the same sense, today’s post is all about you instead of just your company. I interviewed Bill Melton, a partner in our Family Wealth Planning Group here at ASL, for his insights on some personal income tax considerations tech executives run across frequently in his practice…