The rates stayed low for this month. The 7520 rate used extensively in estate planning is at 2.0%, down from 2.2% last month. The mid-term AFR is down to 1.70%.
Author: James V. Roberts
Powers of Attorney
A Blow to Powers of Attorney The Texas Supreme Court denied a motion for rehearing in the case of The Finance Commission of Texas, et al vs. Norwood, et al. The Finance Commission and the Credit Union Commission of Texas had rules and regulations allowing home equity loans to be closed using a power of…
Probate Court Sticks Estate with Legal Fees
In a case arising out of Dallas County, an executor sued to regain possession of property held by another person, spending $27,000 before being successful. Sadly, the executor was denied a request that the court impose those attorneys’ fees on the person who wrongfully withheld the assets from the estate. The court said that there…
Capitalized Interest Not Deductible
A couple got behind on their mortgage. They refinanced in 2010, borrowing an additional $45,000 to pay the past due on their mortgage. The mortgage company issued a 1098 for that year saying it had received less than $10,000 in interest, but the couple claimed that they had paid $48,000 in mortgage interest. The IRS…
Asset Protection in Texas
In a recent ABA webinar, groups of attorneys from an “asset protection state” and a long-term trust state and from Texas offered their different versions of what their state laws allow terms of asset protection. While Texas does not clearly allow self-settled asset protection trusts (where you put your assets into trust and they are…
December Applicable Federal Rates
December Applicable Federal Rates. The rates stayed low for this month. The 7520 rate used in estate planning extensively is at 2.0%. Surprisingly, that is down 0.2% from the prior several months. The mid-term AFR is also down significantly to 1.72%. Last month it was 1.9%.
Employment Taxes
In many cases, people pay for domestic and other help, and do not withhold any employment taxes. Then they die. Some say that the executor should ignore the problem. But the problem with that approach is that the executor, or the successor trustee of the living trust, has an obligation to pay taxes including the…
Inflation Adjustments for Income, Estate, Gift and GST Taxes Coming
In November, Treasury and the IRS are expected to announce the inflation-adjusted rates for all income tax brackets, estate and gift tax exemptions, and the generation-skipping transfer tax exemption. Many commentators have already estimated that the 2015 estate and gift tax exemption, and GST exemption, will be $5,430,000 and the annual gift tax exclusion will…
One-Year GRATs?
The regulations for grantor retained annuity trusts say that GRATs must be for a “specified term of years.” The word “years” seems to tell us that a GRAT must be for more than one year, but, then again, saying “specified term of year” is an odd phrase. Would one year be OK? It would certainly…
Higher Income, Capital Gains and Medicare Taxes – and What to Do
Beginning January 1, 2013, for tax years that end in 2013, the new 3.8% Medicare tax on net investment income goes into effect for single taxpayers with $200,000 or more of adjusted gross income, and married taxpayers filing jointly of $250,000 or more of adjusted gross income. Tax Applies to ALL Profit on Real Estate…