Estate, Gift and Generation-Skipping Transfer Tax Law in 2018 - December 24, 2017

On December 22, 2017, sweeping changes to the federal tax law were finalized. While changes to the income tax are dramatic, changes to the estate tax are also significant.
Starting in 2018, the estate, gift, and generation-skipping transfer tax exemptions for US citizens and residents have been increased to $11,200,000 ($22,400,000 for married couples). Estates will continue to receive a "step up" in basis for income tax purposes. Absent further legislation, the exemptions will fall again after eight years (January 1, 2026).
The tax rate applicable to estates, gifts, and generation-skipping transfers will continue to be 40%. The annual exclusion for gifts will be $15,000, and the exclusion applicable to gifts to a noncitizen spouse will be $152,000.
Zaffre clients will automatically receive an assessment of the new law's impact on their estate plans (free of charge) in the anniversary month of the signing of their plans.

IRS Interest Rates for December 2017 and January 2018 - December 24, 2017

The Internal Revenue Service has published interest rates applicable to certain intra-family transactions (such as loans, GRATs, etc.). For transactions in December, the short-term rate is 1.52%, the mid-term rate is 2.11%, the long-term rate is 2.64%, and the 7520 rate is 2.6%. For transactions in January, the short-term rate is 1.68%, the mid-term rate is 2.18%, the long-term rate is 2.59%, and the 7520 rate is 2.6%.

Section 501(c)(4) Organizations Required to Notify IRS - April 25, 2016

Historically, organizations exempt from income taxation under Section 501(c)(4) of the Internal Revenue Code were not required to apply for exemption or even to notify the IRS of their existence. New Section 506 of the Internal Revenue Code requires Section 501(c)(4) organizations to notify the IRS that the organization is operating as a 501(c)(4) organization, generally within 60 days of organization. The IRS has not yet specified the manner in which the notification is to be submitted but has announced temporary regulations will be forthcoming. As a result, the deadline for notifying the IRS will be extended at least 60 days after the IRS publishes temporary regulations. See Notice 2016-09. Note: For organizations formed in California, the Franchise Tax Board has different rules.

California Creates Transfer on Death Deed - January 20, 2016

California has created a new kind of transfer at death -- the revocable transfer on death deed. This is a simple deed whereby qualifying real property will transfer at the death of the transferor to the named recipient. This option was created for those who cannot afford to implement a real estate plan. Zaffre does not recommend this type of transfer for its clients.

Tax Break for Charitable Contributions from IRAs Made Permanent - December 22, 2015

On December 18, 2015, the President signed legislation making permanent a rule permitting transfers from IRAs to qualified charities. Absent the rule, a distribution from an IRA must be taken into income and thereafter a charitable deduction must be claimed. Prior to the new legislation, the rule had been consistently set to expire, only to be extended for a limited time at the last minute. The deduction is subject to limitations. The rollover rule has no such limitations. The rule applies to qualifying transfers of up to $100,000 each year from the IRA of a person who is over 70 1/2 years of age. The rule is detailed and strict compliance is essential.

Google Announces Inactive Account Manager - April 26, 2015

Google has announced that users will be able to specify what happens to their Google accounts if their accounts are "inactive" for a specified period of time (e.g., because the user died). Options include deleting all data and giving access to others automatically. Google will send a warning well in advance of taking the action to avoid mistakes.

Facebook Allows Legacy Contact - February 13, 2015

Facebook recently announced that users may designate a "Legacy Contact" to manage their Facebook page after their death. The Legacy Contact would be permitted to access the deceased user's page, write posts, accept friend requests, and the like. To access the feature and to learn more, go to Settings, Security, Legacy Contact, and select Edit. By default, there is no Legacy Contact, so be sure to add one.