On November 6, 2019, the IRS published Rev.Proc. 2019-44 which contains all of the inflation adjusted rates and amounts for 2020. These include the tax rate tables for use in computing income, kiddie tax rates, capital gains rates, adoption credit, lifetime learning credit, etc. For example, one notable change is the standard deduction for married…
Category: Tax
Inflation Adjusted 2020 Figures Announced
The IRS has announced the inflation adjustments for the estate and gift tax exclusion, the generation-skipping transfer tax exemption, the gift tax exclusion and other estate planning numbers for 2020. The estate and gift tax exclusion amounts will be $11,580,000. This year, it is $11,400,000, so that is an increase of $180,000. The generation-skipping transfer…
Taxpayer Wins in Kaestner – Beneficiaries’ Residence Alone is Insufficient to Justify State Tax on Trust Income
On June 21, 2019, the United States Supreme Court handed down its decision in North Carolina Department of Revenue v. Kimberly Rice Kaestner 1992 Family Trust (no. 18-457)(https://www.supremecourt.gov/opinions/18pdf/18-457_2034.pdf). The issue in the case was whether the state of North Carolina could tax the income of the trust based solely on the North Carolina residence of…
Texas Legislative Update
Hundreds of bills are filed in the Texas Legislature every time it meets. Only a few make it to the Governor’s desk. Here are a few that have and have not been well publicized. Following a brief explanation of each bill, you’ll find a link to the bill on the Texas Legislature’s website. Expanded Exemptions…
Applicable Federal Rates for June 2019
On May 16, the IRS announced the applicable federal rates for June 2019 in Rev.Rul. 2019-14. The Section 7520 rate remains at 2.8% (still a good time to consider GRATs). The annual short-term, midterm and long-term rates are up slightly to 2.37%, 2.38% and 2.76%. That Revenue Ruling can be found here: https://www.irs.gov/pub/irs-drop/rr-19-14.pdf
Taxpayer Misapplied Rules Re: Optional Deduction on Estate or Income Tax Returns
The Second Circuit handed down a decision on March 13, 2019, in the case of Harrell v. Commissioner. Mrs. Harrell had received distributions from the New York City Employees’ Retirement System in 2009 and 2010, as the beneficiary of Howard Wilkerson who died in 1994. The benefits were payable to her as an annuity, which…
A More Efficient IRS – Hopefully
In an extraordinary bipartisan effort, top tax writers from both the House and Ways and Means Committee and from the Senate Finance Committee put together legislation to improve how the IRS works: modernize it, improve taxpayer services and strengthen taxpayer protections. On March 28, the Taxpayer First Act of 2019 was introduced in both the…
New Procedures for Getting EINs
On March 28, 2019, the IRS made a sudden change in how taxpayer ID numbers can be obtained “as part of its ongoing security review.” The change is effective May 13. The IRS said that only individuals with tax ID numbers may request employer ID numbers as the “responsible party” on the application. In other…
Interest Rate Inversion
Maybe it’s a good time to do GRATs, and maybe they really won’t work so well. Financial commentators in Forbes, Barron’s, and other publications, and in online sites like TheStreet.com and Bloomberg.com, have been talking about something called an “inverted yield curve” since last summer. Basically, they all explain that the yield curve is the…
Applicable Federal Rates for April 2019 – What Will May Bring?
On March 18, 2019, the IRS released the AFRs for April. The Section 7520 rate is 3.0%, down from 3.2% in February and March, and even lower than the 3.4% rate in January. The annual short-term, midterm and long-term rates are 2.52%, 2.55% and 2.89%. The Section 382 adjusted long-term rate is 2.19% and the…