scholarly journals Estate Tax Planning And Marketing Oppor-tunities Of The Economic Growth And Tax Relief Reconciliation Act Of 2001

2011 ◽  
Vol 1 (2) ◽  
Author(s):  
Cassie F. Bradley ◽  
James E. Coleman
Keyword(s):  
Planning Process ◽  
Tax Planning ◽  
Optimal Time ◽  
Estate Tax ◽  
Tax Practitioners ◽  
Tax Relief ◽  
The Gift ◽  
Planning Strategies ◽  
One Year ◽  
Gift Tax

The best advice tax practitioners can give clients after the 2001 Tax Relief Act, is that the optimal time to die in the next decade will be 2010! What has been touted as a repeal of the Federal estate tax, has actually resulted in increasing the importance of estate tax planning. This is due to several factors. First, the rate reduction is phased in so slowly that in 2009, the top estate rate will still be 45% and the exemption amount only $3.5 million. In 2010, repeal is actually achieved, but for one year only. The repeal sunsets in 2011 when the estate tax comes back in full, using a maximum 55% rate and a $1 million exemption. Basis of inherited property may prove to be a nightmare. Some property will get a stepped up basis, other property will not. Further complicating the picture is that the gift tax has not been repealed.The estate tax planner will be faced with a host of issues to consider. Which estate planning strategies are still valid? What new planning tools will be developed? Many wills will include obsolete provisions and will need to be redrafted. Health of the client will become more important in the planning process. Marketing issues of planning under such uncertainty abound. This paper examines the new estate and gift tax provisions; offers strategies for navigating the sea of complexity and uncertainty; and explores the marketing opportunities for financial planners created by the new law.

scholarly journals Estate Tax Reduction Through Section 2032A Use Valuation

1983 ◽  
Vol 12 (2) ◽  
pp. 105-108
Author(s):  
Terence J. Centner ◽  
Archie Flanders
Keyword(s):  
Gradual Increase ◽  
Economic Recovery ◽  
Farm Families ◽  
Planning Techniques ◽  
Estate Planning ◽  
Estate Tax ◽  
Estate Taxation ◽  
Tax Relief ◽  
Tax Reduction ◽  
The Gift

The Economic Recovery Tax Act of 1981 (ERTA) provides a gradual increase in the unified credit which by 1987 will exempt estates of up to $600,000 from estate taxation. The unlimited marital deduction and the increase of tax-free gifts to an amount of $10,000 per year per donee has freed many farm families from the gift and estate tax burdens that arguably had been causing the break-up of small farms (U.S. Congressional Record, vol. 122; Begleiter). At the same time, however, the estate tax relief resulting from the provisions incorporated in ERTA has not completely remedied the tax problems of farmers. Farm estates greater than $600,000 are still subject to taxation. Expensive technology together with inflation and the appreciation of the value of farm real estate will undoubtedly continue to cause the value of many farm holdings to increase in size beyond the amount exempted by the uniform tax credit. The resultant estate tax liability could require the sale of farm assets in order to raise cash to pay these taxes. Thus, estate planning techniques which diminish estate taxation are still important to farmers.

Planning to Minimize the Risks and Maximize the Rewards of the Estate Portability Election

2015 ◽  
Vol 13 (2) ◽  
pp. 65-81
Author(s):  
William A. Duncan ◽  
John O. Everett ◽  
William A. Raabe
Keyword(s):  
Tax Planning ◽  
Tax Base ◽  
Estate Tax ◽  
Estate Taxation ◽  
Asset Values ◽  
Planning Strategies

ABSTRACT Estate tax planning has been changed substantially with the enactment of the carryover of unused estate tax exclusion amounts from the first spouse to die to the estate of the second spouse. Termed portability, the availability of the deceased spouse's unused exclusion amount (DSUEA) largely eliminates the need for most taxpayers to conduct a series of lifetime asset transfers to balance estates and maximize the use of the exclusions. It also opens an opportunity for a double basis increase adjustment, one when the first spouse dies and a second when the surviving spouse dies. Where the DSUEA is sufficient to offset the additional inclusion from estate taxation in whole or in part, there may be an advantage to using the marital deduction to avoid inclusion in the tax base until the second demise. We explore the combination of estate asset values, appreciation expectations, and appropriate properties within the context of planning with the portability election, as well as the risk variables associated with such planning strategies.

scholarly journals Save the Gold Watch Receipt: An Analysis of the Gift Tax on Athlete Retirement Gifts

2019 ◽  
Vol 29 (2) ◽  
pp. 171-185
Author(s):  
Dylan P. Williams ◽  
Patrick Tutka
Keyword(s):  
Financial Burden ◽  
Professional Athletes ◽  
Estate Tax ◽  
Internal Revenue ◽  
The Gift ◽  
Complex Decision ◽  
Gift Tax

The retirement of professional athletes is an emotional and complex decision for competitors who dedicate their lives to a particular sport. It is common for professional teams, leagues, and other athletes to celebrate the careers of stellar professional athletes with charitable gestures and gifts. However, these gifts can create a financial burden when one is required to pay the gift tax on the item’s value. The purpose of this study is to detail the rules, history, and application of Internal Revenue Code (IRC) Section (§) 102, which could tax athletes who give and receive gifts. Athletes should be cautious when giving gifts, as amounts exceeding the annual and lifetime exclusion limits can trigger the gift tax, causing future complications for decedents with the estate tax. Teams should also explicitly state their lack of a detached and disinterested generosity when honoring an athlete, as the gifts provided are considered taxable compensation.

Kula and relation capital: Rational reinterpretation of primitive gift institution

2011 ◽  
Vol 23 (4) ◽  
pp. 475-512 ◽  
Author(s):  
Jaehyuck Lee
Keyword(s):  
Dynamic Optimization ◽  
Capital Accumulation ◽  
Formal Model ◽  
Social Institution ◽  
Optimal Choice ◽  
Specific Form ◽  
Optimal Time ◽  
Social Exchanges ◽  
Primitive Society ◽  
The Gift

We take the view that social institution can be interpreted as equilibrium outcomes from the rational conduct of social exchanges. ‘Relation capital’ captures the idea that people make an optimal choice in their tie-makings as well as individual acts. We reinterpret from a rational choice perspective the well-known gift institution of primitive society documented by classical anthropological studies, the kula. We provide a detailed analysis of kula in terms of relation capital accumulation and fame building. The dynamic optimization perspective is applied to reinterpret various aspects of this ceremonial exchange. A formal model of the kula economy is provided to show the unstable nature of the gift equilibrium. Optimal time paths of consumption and gift-giving are derived, and a sufficient condition for the instability of the steady state is formally provided. Many qualitative discussions are characterized in terms of formal results, including the reason for the specific form of kula.

scholarly journals The Wealth Defence Industry: A large-scale study on accountancy firms as profit shifting facilitators

2019 ◽  
Author(s):  
Lena Ajdacic ◽  
Eelke Heemskerk ◽  
Javier Garcia-Bernardo
Keyword(s):  
Multinational Corporations ◽  
Large Scale ◽  
Tax Planning ◽  
Professional Service ◽  
Service Firms ◽  
Professional Service Firms ◽  
Profit Shifting ◽  
Defence Industry ◽  
Planning Strategies ◽  
Big Four

Corporations increasingly engage in innovative ‘tax planning strategies’ by shifting profits between jurisdictions. In response, states try to curtail such profit shifting activities while at the same time attempting to retain and attract multinational corporations. We aim to open up this dichotomy between states and corporations and argue that a wealth defence industry of professional service firms plays a crucial role as facilitators. We investigate the subsidiary structure of 27,000 MNCs and show that clients of the Big Four accountancy firms show systematically higher levels of aggressive tax planning strategies than clients of smaller accountancy firms. We specify this effect for three distinct strategies and also uncover marked differences across countries. As such we provide empirical evidence for the systematic involvement of auditors as facilitators in corporate wealth defence.

Code Section 304: The Gift That Keeps on Giving

2019 ◽  
Vol 17 (1) ◽  
pp. 25-39
Author(s):  
Doron Narotzki ◽  
Melanie G. McCoskey
Keyword(s):  
Tax Avoidance ◽  
Tax Planning ◽  
Expected Loss ◽  
Legislative Change ◽  
Planning Tools ◽  
The Gift ◽  
Foreign Corporations ◽  
Jobs Act ◽  
The U.S ◽  
Jel Classifications

ABSTRACT The Tax Cuts and Jobs Act (TCJA) has created a unique opportunity to utilize Code Section 304 and Code Section 245A as powerful tax-planning tools. By utilizing the rules established for redemptions between related corporations under the anti-abuse provisions of Code Section 304 combined with the new 100 percent DRD of Code Section 245A, extracting earnings from affiliated foreign corporations tax-free has never been easier. This paper explains how these two code sections interact with each other and the resulting ability to extract certain foreign-sourced earnings tax-free. It also identifies incentives created by the TCJA to operate profitable businesses overseas and expected loss operations in the U.S. Finally, the paper offers a legislative change to close the tax avoidance loophole created by the TCJA. JEL Classifications: H2.

Tax Planning Strategies: Estate Planning

1995 ◽  
Vol 112 (5) ◽  
pp. P94-P95
Author(s):  
Michael Rosensweig ◽  
Rande Lazar
Keyword(s):  
Tax Planning ◽  
Educational Objectives ◽  
Estate Planning ◽  
Planning Strategies

Educational objectives: To better understand qualified plans and to see how nonqualified plans can supplement qualified plans in the marketplace.

Tax Planning Strategies

2010 ◽  
pp. 55-62 ◽  
Author(s):  
Dieter Endres ◽  
Clemens Fuest ◽  
Christoph Spengel
Keyword(s):  
Tax Planning ◽  
Planning Strategies
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