Employee Benefits Blog

Posts tagged Tax planning

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IRS Clarifies: Deductibility of Administration Expenses for Estates and Non-Grantor Trust

On July 13, 2018, the IRS announced in Notice 2018-61 that the Service will issue regulations confirming that estates and non-grantor trusts will continue to be allowed to deduct expenses that are unique to the administration of an estate or non-grantor trust. The Tax Cuts and Jobs Act (TCJA) of 2017 had created confusion over whether such expenses would be deductible given the changes the Act made to the deductibility of certain expenses by individuals.

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TCJA Impact on Post Term QPRT Planning

Qualified Personal Residence Trusts (QPRT) have been a staple of sophisticated estate planning for some time. They are relatively simple to establish, they are well defined in IRS regulations, and can be structured with minimal initial tax consequences. Particularly for taxpayers living in areas with high property values, the QPRT was a popular choice to help minimize estate tax consequences.

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Blast from the Past Keeps Giving: The Donor Advised Fund

Question: What tax planning tool was born almost 80 years ago and is still offering taxpayers a way to make charitable donations in a meaningful and tax-efficient manner?

Answer: The Donor Advised Fund

The donor-advised fund has a rich history of benefiting both taxpayers and charities. The charitable funds were first introduced in the 1930s by community foundations, but their use flourished as reporting requirements increased for private foundations in the 1970s and as the IRS approved commercial providers in the 1990s. The funds have now launched into the top 10 largest charities in the United States. Fidelity Charitable Gift Fund overtook the United Way as the largest charity in America in 2016. It held the top spot again in 2017 and was joined in the top ranking by the philanthropy funds from Goldman Sachs (#3), Schwab (#6) and Vanguard (#10). Using data from 2010-2016, National Philanthropic Trust found that there were about 285,000 individual funds with over $85 billion in managed assets.

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Tax Planning for Individuals after the Tax Cuts and Jobs Act

The passage of the Tax Cuts and Jobs Act (“TCJA”) in December of 2017 generated some of the most significant tax law changes seen since the Tax Reform Act of 1986. While we await further guidance in the form of Treasury Regulations and many questions remain as to how to apply the new rules, we attempt here to shed light on some planning options as we look ahead to the remainder of tax year 2018.