Georgia residents might like to know about legitimate ways to minimize or eliminate gift and estate taxes. Those who own a successful business may wish to freeze the value of a company to avoid taxes due to future appreciation of the company.
Estate planning professionals in Georgia and around the country will likely welcome news that the Internal Revenue Service has made it easier for a surviving spouse to receive the unused portion of the deceased partner's estate tax exemption. Under Revenue Procedure 2017-34, the executors of individuals who died in 2011 or later will have until January 2018 or later to make what are known as portability elections. The executors of estates of individuals who died on or after Jan. 2, 2016 have two years to make portability elections under Revenue Procedure 2017-34. The new rules went into effect immediately.
When Georgia residents consider writing a will, they are often concerned with ensuring that their loved ones are provided for, that minor children will be taken care of, and that their end-of-life medical decisions will be respected. One area that is sometimes neglected is that of charitable giving.
Careful estate planning can be used to reduce the tax burden on assets that are intended for the next generation. Georgia residents may want to know if estate planning is necessary if the federal estate tax will be repealed as promised by the current presidential administration.
Artists and celebrities in Georgia might want to consider the value of their images or likenesses when making an estate plan. The image of someone who earned a living as an entertainer or was famous might continue to be profitable after death, and estate taxes could apply to that after-death value.
The death of Prince at just 57 years of age in April 2016 left music fans in Georgia and across the country saddened. The iconic performer reinvented himself on a number of occasions during a glittering career that spanned more than four decades, but his failure to put even the most basic of estate plans into effect has benefited the federal government at the expense of his heirs. Experts say that estate taxes will claim more than half of Prince's estate, which has been valued at about $200 million, but they also point out that this could have been prevented fairly easily with some prudent estate planning.
When an estate is worth more than the federal exemption, estate tax rates could be as high as 40 percent. Georgia residents may need to know about the importance of taking into account these contingencies when they are planning their estates.
Georgia residents may have heard about Donald Trump's plan to repeal the federal estate tax. While he may end up cutting some taxes, it is important not to base an estate plan on the president-elect's campaign statements. Individuals who are planning their estates should not assume that federal estate taxes are going away just yet.
Heirs to family businesses in Georgia may soon be facing a steeper tax burden. The practice of discounting estates for the purpose of reducing the estate tax burden has come under fire with proposed Treasury Department regulations. The 2704 regs, as the rules changes have been dubbed, were questioned at a public meeting with the Department of Tax Policy head. Estate discounts have been on the Treasury's chopping block for years, according to one author. Family business owners and tax attorneys were among the challengers of the rule changes.
Georgia residents who are planning to file their 2016 federal income tax return may also be giving some thought to estate planning. At the end of the year, a person may choose to make annual gifts to loved ones as a way to reduce the size of their estate and avoid estate taxes. The Annual Exclusion Amount for 2016 is $14,000 per recipient, and the exclusion will remain at the same level in 2017.