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When creating estate plans, people generally take their children and grandchildren into consideration and plan accordingly. For those who would like to plan beyond the next two generations, using a dynasty trust may be the answer. A dynasty trust can preserve substantial amounts of wealth — and potentially shelter it from federal gift, estate and generation-skipping transfer (GST) taxes — for generations to come. Plus, it can provide various other...
Read moreIf you’re a philanthropic individual who is also obligated to take required minimum distributions (RMDs) from a traditional IRA, you may want to consider a tax-saving strategy. It involves making a qualified charitable distribution (QCD). How it works To reap the possible tax advantages of a QCD, you make a cash donation to an IRS-approved charity out of your IRA. This method of transferring IRA assets to charity leverages the...
Read moreThe IRS has published new regulations relevant to taxpayers subject to the “10-year rule” for required minimum distributions (RMDs) from inherited IRAs or other defined contribution plans. The final regs, which take effect in 2025, require many beneficiaries to take annual RMDs in the 10 years following the deceased’s death. SECURE Act ended stretch IRAs The genesis of the new regs dates back to the 2019 enactment of the Setting...
Read moreTraditional and Roth IRAs can be powerful estate planning tools. With a “self-directed” IRA, you may be able to amp up the benefits of these tools by enabling them to hold alternative investments that offer potentially greater returns. However, self-directed IRAs may present pitfalls that can lead to unfavorable tax consequences. Therefore, you need to handle these vehicles with care. Alternative investments Unlike traditional IRAs, which typically offer a limited...
Read moreThe Inflation Reduction Act provided the IRS with billions of dollars of additional funding to reduce the so-called “tax gap” between what taxpayers owe and what they actually pay. The tax agency has already launched numerous initiatives aimed at this goal, including several business-related compliance campaigns. Let’s take a closer look at three of the most significant recent targets. Abusive pass-through practices The IRS has accelerated its enforcement efforts against...
Read moreWith school out, you might be hiring your child to work at your company. In addition to giving your son or daughter some business knowledge, you and your child could reap some tax advantages. Benefits for your child There are special tax breaks for hiring your offspring if you operate your business as one of the following: A sole proprietorship, A partnership owned by both spouses, A single-member LLC that’s...
Read moreWhen it comes to digital assets, it’s important to know that, unlike many assets, they leave little to no “paper trail.” Thus, unless your estate plan specifically provides for them, it may be difficult for your family to access these assets — or even know that they exist. Let’s take a look at how to properly address digital assets in your estate plan. Inventory your assets Make a comprehensive list...
Read moreDo you invest in mutual funds or are you interested in putting some money into them? If so, you’re part of a large group. According to the Investment Company Institute, 116 million individual U.S. investors owned mutual funds in 2023. But despite their widespread use, the tax rules involved in selling mutual fund shares can be complex. Review the basic rules Let’s say you sell appreciated mutual fund shares that...
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