Trusts: Fully Deductible Expenses vs AGI Limit

Generally, miscellaneous itemized deductions may be deducted to the extent they exceed 2% of adjusted gross income (AGI). Miscellaneous itemized deductions can include tax preparation fees, investment fees, estate planning legal fees, and safe deposit box charges, to name a few. The same idea applies for estates and trusts, with some exceptions. And the exceptions …

Keep Reading

What every trustee should know: the 65 day rule

Trustees interested in managing the tax burden of a complex trust should be familiar with the 663(b) election, also known as the “65 Day Rule”. Making this election can often help to lower the overall tax burden of the trust and its individual beneficiaries. Trusts pay the highest tax rate at the very low amount …

Keep Reading

Exemption for Estate and Gift Tax Rises to $5,450,000 in 2016

The IRS released the 2016 estate and gift tax amounts and due to the very low inflation rate, the 2016 numbers were very similar to the 2015 amounts. In Revenue Procedure 2015-53, the IRS calculates the unified estate tax exclusion for decedents dying in 2016 and the gift tax lifetime exclusion will rise to $5,450,000. …

Keep Reading

Inherited Property Reporting Now Extended to February 29, 2016

Under the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 which was signed into law on July 31, 2015, the executor of an estate required to file an estate tax return under Code Sec. 6018(a) or (b) must provide a statement identifying the value of the property reported on the estate tax …

Keep Reading

Inherited savings bonds – what do you need to know?

Statistics suggest that many savings bonds fall through the cracks because bondholders do not keep track of them nor let heirs know about them. Over $9 billion worth of savings bonds have stopped earning interest, but have not been cashed, according to Treasury Direct, a service of the U.S. Department of the Treasury. It is …

Keep Reading

IRS: No More Estate Tax Closing Letters…Unless You Ask

On the IRS.gov website, the IRS announced that for estate tax returns (Form 706) filed on or after June 1, 2015, estate tax closing letters will be issued only upon request by the taxpayer. Historically, the IRS’s “Frequently Asked Questions on Estate Taxes” website has provided that personal representatives can expect a closing letter to …

Keep Reading