Florida Estate Planning and Probate Law Blog focused on recent case law and planning ideas.

IRS GIFT TAX RULES

Under the Internal Revenue Service (IRS) rules, the service has a three (3) year statute of limitations after the filing of IRS Form 709 to assess gift taxes on a gift, so long as the gift is adequately disclosed on the return. If a gift is not disclosed on Form 709, the statute of limitations does not begin to run on that gift. Form 709 requires the disclosures of prior gifts, so that the tax on the current gifts can be properly calculated (since prior gifts can impact the rate of tax and available unified credit applicable to the current year computations). The question has arisen as to what happens if a gift is improperly reported on a return? A recent Chief Counsel Advice 201643020 concludes that the Code does not support an extended statute of limitations in this circumstance. However, I do not recommend filing an improper return with the IRS.

WHAT TRUMP'S FEDERAL INCOME TAX PLAN MAY LOOK LIKE

Most individuals expect significant changes to the US Tax Code once President (elect) Trump takes office. High on his agenda are the following: INDIVIDUALS: Cut the number of individual income tax brackets (from 6 to 3) and bring income tax rates down to 12%, 25% and 33% - that would benefit everyone who works across the board. Elimination of the 3.8% Obamacare tax - if Obama Care goes away this extra tax on the wealthy will go away with it. Tax carried interest gains as ordinary income. Retain 20% capital gains rate for non-corporations. Increase the standard deduction for joint filers to $30,000 from $12,600, while eliminating personal exemptions - basically a wash. $200,000 cap for itemized deductions for joint filers - this will only impact high earners. Most importantly, repeal of the estate tax (a double tax for those who leave an inheritance to their children, etc..). This would be offset by no step-up in basis at death, except on first $10 million of assets. CORPORATIONS | BUSINESS: Lower the business tax rate for corporations and small businesses alike to 15%, but with elimination of many deductions - we have one of the highest corporate tax rates in the world. Ever wonder why so many companies leave the US for foreign shores. Elimination of corporate alternative minimum tax - to bring american business back home. A 10% one-time tax on repatriation of corporate profits held offshore - could raise trillions of dollars. Allow U.S. manufacturers to elect to expense capital investment and lose the deductibility of corporate interest expense.

2017 FEDERAL INCOME TAX FIGURES

Standard deduction - married filing jointly = $12,700 Standard deduction - single persons = $6,350 Standard deduction for a dependent = $1,050 Overall Limitation on itemized deductions (Section 68(b)) = $313,800 (Married person) Personal exemption = $4,050 Unified credit against estate tax and gift tax = $5,490,000 Gift tax annual exclusion = $14,000 (no change) Gift tax annual exclusion for gifts to noncitizen spouse = $149,000