{"id":2725,"date":"2016-08-16T09:40:10","date_gmt":"2016-08-16T17:40:10","guid":{"rendered":"http:\/\/ssslegalconsultancy.com\/?p=2725"},"modified":"2016-07-19T13:45:24","modified_gmt":"2016-07-19T21:45:24","slug":"income-tax-time-bomb-lurking-estate-plan","status":"publish","type":"post","link":"https:\/\/ssslegalconsultancy.com\/income-tax-time-bomb-lurking-estate-plan\/","title":{"rendered":"Is There an Income Tax Time Bomb Lurking in Your Estate Plan?"},"content":{"rendered":"
<\/a><\/strong>As the federal estate tax exemption has ballooned from $1.5 million ten years ago to $5.43 million today, the need for estate tax planning has drastically decreased.\u00a0 Instead, higher income tax rates that were ushered in under the American Taxpayer Relief Act of 2012 (ATRA) have shifted the focus of estate planning to a new frontier:\u00a0 income tax basis planning.<\/em><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n The Basics of Income Tax Basis<\/strong><\/p>\n <\/p>\n In its simplest form, income tax basis is the cost to buy an asset.\u00a0 Basis must be tracked because when an asset is sold, income tax liability in the form of capital gains is calculated by subtracting the basis from the sales price.\u00a0 Basis plays an important role in estate planning in two ways:<\/p>\n <\/p>\n <\/p>\n <\/p>\n AB Trust Planning:\u00a0 An Income Tax Basis Nightmare for Many Couples<\/strong><\/p>\n <\/p>\n Including assets in a deceased person\u2019s estate is the key to giving heirs a stepped-up basis.\u00a0 Yet traditional planning for married couples using an AB Trust Plan deliberately excludes<\/em> property from the surviving spouse\u2019s estate.\u00a0 An AB Trust Plan, also known as a Marital or QTIP Trust\/Family or Bypass Trust Plan, works as follows:<\/p>\n <\/p>\n <\/p>\n <\/p>\n \u00a0<\/strong><\/p>\n How to Build Basis Planning Into Your Estate Plan<\/strong><\/p>\n \u00a0<\/strong><\/p>\n There are several options to choose from if your goal is to maximize basis for your heirs:<\/p>\n <\/p>\n <\/p>\n Your circumstances will impact which option is the best fit. The great news is there\u2019s almost always something that can be done to achieve your estate planning and asset protection goals with good basis planning.<\/p>\n <\/p>\n Do You Need a Basis Planning Review?<\/strong><\/p>\n <\/p>\n Instead of falling back on \u201cone size fits all\u201d AB Trust plans, today estate planners must look carefully at each client\u2019s unique family situation, financial position, and potential estate tax liability to determine the appropriate mix of techniques to minimize both estate taxes and income taxes.\u00a0 If your estate plan is more than a few years old, chances are it contains an income tax time bomb.\u00a0 Please call us<\/a> if you have any questions about basis planning and to arrange for a basis planning review.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" As the federal estate tax exemption has ballooned from $1.5 million ten years ago to $5.43 million today, the need for estate tax planning has drastically decreased.\u00a0 Instead, higher income tax rates that were ushered in under the American Taxpayer Relief Act of 2012 (ATRA) have shifted the focus of estate planning to a new […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[7,12,161],"acf":[],"yoast_head":"\n\n
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