Legacy Giving News and Information
July, 2018
The following is intended as general information and does not represent legal or tax advice. The information presented is the view of the author. Individual circumstances vary - please consult your legal and tax advisors about your specific situation. To return to the general planned giving pages, please close this browser window. This News and Information section has been compiled by Future Focus.

Whatever you spend is gone. What you keep, someone else gets. What you give is yours forever.

Dr. Wil Rose

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Five Shrewd Family Money Moves
How to cut taxes when moving funds from one generation to another.
If current laws remain in place, very few of your clients (and their heirs) are likely to be hit with substantial estate taxes. Instead, current and future income and capital gains taxes may be the biggest controllable corrosive threat to your clients’ goals of multigenerational wealth. These five strategies can maximize the assets received by family members, while reducing or eliminating the overall tax bite taken by Uncle Sam.

12 Ways To Beat Capital Gains Tax In The Age Of Trump
Got capital gains? Don’t fret. Under the Trump tax overhaul, effective as of tax year 2018, most of the old tricks to avoid or reduce the capital gains tax bite on sales of appreciated assets still work, albeit with tweaks. “The zero-percent capital gains rate is a terrible thing to waste,” says Timothy Wyman, a certified financial planner in Southfield, Michigan. But what’s really got wealth advisors and their rich clients excited is a powerful new triple-tax-efficient play - Read more.

Eight Tips to Protect Taxpayers from Identity Theft
Identity theft happens when someone steals personal information for financial gain. Tax-related identity theft happens when someone uses another person’s stolen Social Security number (SSN) or Employer Identification Number (EIN) to file a tax return to obtain a fraudulent refund. Many people first find out they are victims of identity theft when they submit their tax returns. That’s because the IRS lets them know someone else already used their SSN to file. Check out these eight tips on how to protect against identity theft:

Fidelity Says Retirees Need $275,000 Just For Health Expenses
A 65-year-old couple retiring this year will need $275,000 to cover healthcare expenses throughout retirement, according to the latest Fidelity estimate. That’s up 6% from last year’s estimate of $260,000, and up more than 70% from the 2002 estimate of $160,000. The $275,000 per couple includes Medicare premiums, Medicare copayments and deductibles and prescription drug out-of-pocket expenses (it does not include long-term care costs at home or in a nursing home, over-the-counter medications, dental—or cosmetic work). Read more.

Declutter Your Retirement Savings: What To Do With Your Old 401(k)s And IRAs
How many retirement accounts do you have? By age 50, baby boomers have held an average of 12 different jobs--half of them since age 24--according to the Bureau of Labor Statistics. So, you might have several 401(k) accounts from old employers, as well as an IRA, a Roth IRA, and maybe a SEP-IRA you set up to save income from gig work. While having more retirement dollars is a good thing, having more accounts isn’t so. By combining accounts, you may be able to cut fees and keep better track of your asset allocation---thus building more wealth. You’ll also reduce hassles later when you start drawing from the accounts (required minimum distributions typically start at age 70 ½). Read more.

Trusts in the Age of Trump: Time To Re-Engineer Your Estate Plan
The federal tax overhaul just doubled the amount of wealth you can pass to heirs estate-tax-free--without using any trusts or planning gimmicks. Yet rather than looking for a new specialty, top trust lawyers are positively giddy about the opportunities created by the law. The letter of the law allows slightly more than $11 million per person to be passed to kids or other noncharitable heirs free of federal gift or estate tax. But by employing aggressive techniques, New Jersey estate lawyer Martin Shenkman figures, a couple could use their combined $22 million tax exemption to transfer more than a quarter-billion of assets into an irrevocable dynasty trust, where that wealth can continue to grow and pass, estate-tax-free, to an unlimited number of future generations. Read more.

Are You Financially Ready To Live To 100?
You’d think that having at least $1 million in the bank would allay concerns about the financial implications of old age, but it seems as if wealthy investors are a worried bunch. More than half of wealthy investors globally expect to live for 100 years, and the prospect of living that long creates financial anxiety. Can I afford to live that long? Longevity is a hot topic—if a tough topic—for financial advisors and their clients. Read more.

To Snag The New 20% Business Income Tax Deduction: Think Retirement
If you’ve got self-employment income, you should be thinking about your 2018 taxes now, not just your 2017 tax return due April 17. That’s because of a big opportunity that kicked in Jan. 1, thanks to the new tax law: a new 20% business income tax deduction. When the tax overhaul first came out, a common misconception was that the new qualified business income deduction didn’t apply to those in the professional services industry. But it’s more nuanced than that. Section 199A allows owners of sole proprietorships, S Corporations and partnerships to take a deduction of 20% against their business income, except if you’re in a “specified service business”---unless your income is low enough. Read more.

What Beats A Charitable Bequest Under The New Tax Law?
The Trump tax overhaul made the federal estate tax a non-issue for nearly all Americans, meaning that for anyone whose net worth is under $11.2 million, a bequest to charity via a will doesn’t save taxes. So, why not get an income tax deduction now for property that passes to charity at death? It might sound complicated, but it’s not.
“Many people go to their lawyers and add a charity in their wills. Instead, I suggest they consider a charitable remainder trust or a charitable gift annuity,” says tax lawyer Conrad Teitell, chairman of the Charitable Planning Group at Cummings & Lockwood who has published the Taxwise Giving newsletter since 1964. Read more.

Conservation and Preservation Easements Offer Huge Tax Benefits
Conservation and preservation easements offer taxpayers some of the largest charitable contribution deductions to be had under the U.S. tax code. This fact is extraordinary when one considers that no property actually changes hands under such an agreement. Rather, the owner of the land, building or art collection in question maintains his or her ownership but pledges, to the greatest extent possible, to preserve the resource in its present state. Read more.

Tax deductions even if you don't itemize for 2017 and 2018
The larger standard deduction under the Tax Cuts and Jobs Act (TCJA) that took effect this year has gotten a lot of attention. One of the big pluses, cite fans of the new nearly doubled standard deduction amounts, is that more people will claim them instead of itemizing tax deductible expenses. But regardless of whether you itemize now, plan to under the new tax law or never ever messed with a Schedule A and don't plan to start, there still are some tax deductions you can claim. Read more.

IRS Official Audit Rate Down But The "Real" Audit Rate Is The Problem
The Internal Revenue Service audited only 0.6% of 2016 individual income tax returns, according to its 2017 Data Book. That means your chance of an official audit was about 1 in 160.
The National Taxpayer Advocate, an IRS watchdog, begs to differ. The way it defines “audit,” your chance of hearing from the IRS is more like 1 out of 16. Read more.

How the new 2018 tax law makes planned giving more powerful
Many have worried about the negative impact of the new tax law on charitable giving. A higher standard deduction means fewer itemizers. Non-itemizers can’t use charitable tax deductions. But, the new tax law makes charitable giving more attractive for many high wealth and high income donors. For those still using them, charitable deductions became more valuable because: (1) effective combined income tax rates rose for many in higher tax states due to the cap on state tax deductions, (2) marginal federal income tax rates rose for those in the bubble range of $200,000 to $416,700 for individuals, (3) Pease amendment cuts to charitable deductions were eliminated, and (4) income limitations on charitable deductions for gifts of cash were raised from 50% to 60%. Beyond this, other changes have made gifts of appreciated assets – and all the planned giving vehicles using appreciated assets – much more attractive than last year. Read more.


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Please note, individual financial circumstances will vary. The information on this site is meant as general information and does not represent legal or tax advice. The information presented is the view of the author. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. This News and Information section has been compiled by Future Focus. Please report any problems to webmaster.