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IRS Issues Final Regulations Quashing Taxpayer Fears of Clawback on Gifts

https://www.google.com/url?sa=i&source=images&cd=&ved=2ahUKEwjXhI6W9oDnAhUIVs0KHUSsAyoQjRx6BAgBEAQ&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FUnited_States_Department_of_the_Treasury&psig=AOvVaw3-KJts_b0uQwIYTZ0cp-4l&ust=1579016816822422The Treasury Department issued final regulations on  November 26, 2019 (Treasury Decision 9884) confirming that taxpayers will not be subject to “clawback” of the value of their pre-2026 gifts of the temporarily increased gift and estate tax exemption.

Pursuant to the final regulations, taxpayers will be able to use (prior to 2026) the full increased gift and estate tax exclusion that became available beginning in 2018 under the citing the Tax Cuts and Jobs Act (TCJA) without concern that the IRS may attempt to include gifts that exceed the post-2025 exclusion amount in the taxpayer’s taxable estate at death.  This concern that lifetime gifts in excess of the exclusion amount at death might be included in the taxable estate of the decedent has come to be known as “clawback.”  The TCJA itself directed the IRS to publish regulations clarifying the clawback question and related

Fleeing New York for a Tax Home in Florida

Fleeing New York for a Tax Home in Florida

January 8, 2020

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

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As we deal with the first snowfall of the season in New York, many New Yorkers may think about picking up and moving to Florida to avoid the cold winter.  Many New Yorkers also think about making Florida their tax home, to take advantage of the favorable estate and income tax laws there.  Florida has no personal income tax and no state estate tax, whereas New York currently has an income tax rate as high as 8.82% and estate taxes on estates over $5,850,000.00 at a rate as high as 16%.  President Trump has recently publicized his decision to make such a move.  But the switch to make Florida one’s legal domicile for tax purposes is not as easy as one might think.

For income tax purposes, if you start off as a New Yorker and file New York state resident income tax

BCLP Senior Counsel Lawrence Brody in December 2019/ January 2020 STEP Journal

Lawrence Brody authored an article in the December 2019/ January 2020 STEP Journal titled US Taxation of Death Benefits.  This article discusses the US income taxation of life insurance death benefits, particularly the exceptions to the general rule that proceeds paid by reason of the death of insured are not included as a part of the beneficiary’s taxable income. The complete article can be accessed by STEP members here.

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