The Income Tax Mulligan for Trusts

For those fortunate souls who have not succumbed to the Siren’s call that is the game of golf, a Mulligan is basically a free “do-over.” The term “mulligan” represents an opportunity to have a second chance to do what you wish you had done from the start. In the world of federal income taxes, there are not many chances at a mulligan. There are even fewer chances at a mulligan for wealthy families.

2023 Tax Brackets and Rates

On a yearly basis the IRS adjusts more than 40 tax provisions for inflation. This is done to prevent what is called “bracket creep,” when people are pushed into higher income tax brackets or have reduced value from credits and deductions due to inflation, instead of any increase in real income.

Summer/Fall 2022 Gift Tax Series: Volume 4: The Renaissance of the QPRT

As has been noted in earlier installments of this series, the current estate and gift tax exemption of $12.06mm is at a historically high level and is set to sunset at the end of 2025. This combination of facts means that many high-net-worth individuals are trying to find ways to take advantage of the exemption now before it’s gone. But not everyone has the ability to part with $12mm of investment assets right now!

Summer/Fall 2022 Gift Tax Series: Volume 2: Spousal Lifetime Access Trusts (with apologies to Ben Franklin)

Benjamin Franklin’s famous observation “in this world nothing can be said to be certain, except death and taxes” is an often-quoted opening remark when discussing the estate tax, so please forgive the quip.  And yet, while death and taxes remain certain, the nature of the tax associated with death is less so.  The federal estate and gift tax regime (often referred to jointly as the transfer tax regime) is a political football that gets tossed around with predictable regularity.  While our clients carefully prepare for the future, changing winds in Washington can and often do result in uncertainty.

Efficient Wealth Transfers for Consideration

30,000’ Level: Taxes, Broadly

Our clients ask us a lot about how they can be tax efficient.  That can mean a lot of different things, of course, because there are many forms of taxes.  They could be thinking about property taxes, sales taxes, income and capital gains taxes, or wealth transfer taxes (taxes on wealth that is transferred from one person to another).  And within these types of taxes, there are also levels of tax – local, state, and federal taxes to boot!