Certified Public Accountants CPAs - Santa Ana, Orange County California
& Business Advisors
We as advisors are frequently asked "what entity is best to own investment real estate?" The answer for both income tax and estate tax planning is fairly easy, but we'll focus on the estate tax planning issues. We don't recommend owning real estate in a "c" corporation. From an estate tax perspective, if a shareholder dies, their tax basis in the corporation's stock receives a step up in value but the assets of the corporation do not. An "s" corporation is … [Read more...]
The fiscal cliff has been averted not just for income taxes but for estate and gift taxes as well. Without the newly enacted American Taxpayer Relief Act of 2012 the estate and gift tax exemption would have reverted to $1,000,000 and tax rates increased to 55%. Here are the new limits for 2013: The estate and gift tax exemption amount will remain at $5,120,000 per person or $10,240,000 for two spouses. Exemptions will increase in the future for … [Read more...]
When a loved one dies, the last thing anyone wants to think about is paying Uncle Sam. If the decedent's net worth is tied up in a family business, paying the estate tax due on the fair market value of the business within the required nine months can be a daunting and stressful task. The IRS has recognized that closely held business owners usually have a majority of their cash tied up in the assets of a family business and when an owner dies, the estate has a hard … [Read more...]
An individual who passes away in 2012 with an estate of less than $5.12 million is not required to file an estate tax return, but thanks to the new IRS “portability election”, filing the return can benefit the surviving spouse. If the estate is less than $5.12 million (the exclusion amount), the unused portion of the exclusion can be “ported over” and added to the exclusion amount of the surviving spouse’s estate, but only if an election is made on a timely … [Read more...]
Federal estate tax exemption levels have been on a roller coaster ride over the past several years and it looks as if the ride will stop at the end of 2012. In 2010, there was no estate tax so if you had an estate of $50 million dollars and you passed away, there was no estate tax. For 2011, the estate tax exemption was $5,000,000. In 2012 the estate tax exemption per individual is $5,120,000 with a top tax rate of 35% for any amount above that. Currently, the estate tax … [Read more...]
Estate planning can be a tricky road, especially after the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (TRUIRJCA 2010). I found this really great article from Brown & Streza LLP, click here. For more information call Sherry Radmore at 714.569.1000. Posted 5/5/2011 … [Read more...]
Effective January 1, 2000, the California Healthcare Decisions Laws consolidated previous care directives, Durable Powers of Attorney for Healthcare and Natural Death Act Declarations, into the new Advanced Healthcare Directive that we have today. This law includes designating a health agent to make have legal authority to make healthcare decisions if you are no longer able to speak for yourself. The law also allows you to make specific written instructions for your … [Read more...]
Inherited property continues to qualify for a stepped-up tax basis, even after recent tax changes. A Cost Segregation Study of your depreciable property will provide results which result in faster depreciation deductions. Shorter depreciation periods reduces income taxes in the early years of ownership, greatly increasing the cash flow in those early years. A Cost Segregation Study on inherited property, for example, will assign a tax basis to the land improvements, … [Read more...]
