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(November 17, 2020, 10:00 p.m. EDT) Here's a chance for us all to come together. No matter whether you voted Red or Blue, tax planning is about green!
(November 11, 2020, 11:00 p.m. EDT) With the election of Joseph R. Biden Jr. as the 46th U.S. President, higher federal taxes are almost certain to be enacted in 2021.
(November 3, 2020, 9:00 p.m. EDT) The Enforcement Division of the U.S. Securities and Exchange Commission released its annual report yesterday. Since it's probably not on your reading list, here are highlights investors need to know.
(Tuesday, Oct. 27, 2020; 9:00 PM EST) Rearranging placement of foods increases or decreases their consumption by as much as 25%.
(Tuesday, Oct. 20, 2020; 10:30 PM EST) In America's capitalist system, an economic cycle entails destruction of businesses and their replacement with better businesses. It's survival-of-the-fittest, a process in which the ranks of businesses are periodically thinned by recessions.
(Tuesday, Oct. 13, 2020; 10:30 PM EST) The six tech giants that have dominated stock performance in 2020 were less dominant over the last three months. The stock market rally broadened.
(Tuesday, Oct. 6, 2020; 10:00 PM EST) Stocks posted a +8.9% gain in the third quarter of 2020, following a +20.5% gain in the second quarter of 2020, which followed a -19.6% Covid-related loss in the first quarter of 2020.
(Wednesday, Sept. 30, 2020; 9:30 PM EST) Should the Democrats win the White House and Senate on November 3, high-income individuals, along with those having estates valued at more than $1.1 million, will have to assess and implement tax reduction strategies before the end of the year. Complicating matters, the election results may be contested and delayed, making it even more important to be prepared to act swiftly.
(Tuesday, Sept. 22, 2020; 10:30 PM EST) Covid has suddenly imposed tax and financial obstacles that can make year-end tax planning more challenging in certain situations. Business owners, families with more than $1.1 million in assets in stocks, bonds and real estate, and retirees who take required minimum distributions (RMDs) from an IRA, 401(k), or other qualified retirement account are at risk of missing these major opportunities to reduce their taxes by acting before the end of the year.
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Foreign Intrigue In Estate Planning
Published Monday, September 18, 2017 at: 7:00 AM EDT
Are you married to someone who isn't a U.S. citizen? If you are, special estate planning considerations may come into play.
Whether your spouse is a citizen or not, you can use the same basic estate planning documents without any reservations. You can create a will bequeathing assets to your spouse, name him or her as a beneficiary of retirement accounts, and designate your spouse as the agent under a power of attorney. No problems there.
But things get trickier when your spouse inherits assets. Normally, property transferred from one spouse to another, during your lifetimes or when one of you dies, is completely exempt from gift or estate tax thanks to an unlimited marital deduction. But that doesn't apply to non-citizen spouses.
Instead, you can make use of a $5.49 million unified gift and estate tax exemption that covers transfers to any beneficiaries, including a non-citizen spouse.
In addition, you can give a non-citizen spouse as much as $149,000 (in 2017; the amount is indexed for inflation) in gifts during your lifetimes.
Other ways to avoid being subject to the rules for non-citizen spouses may include:
1. Have your spouse become a U.S. citizen. This can be an obvious solution. It allows your spouse to qualify for the unlimited marital deduction by the time your federal estate tax return is due. That's generally nine months after death, but the IRS may grant a six-month extension.
Because it takes time to obtain citizenship—there is a waiting period before you can even apply—it's important to start sooner than later.
2. Rely on a QDOT trust. With a qualified domestic trust (QDOT), you can leave property to the trust, rather than directly to your spouse. Then your spouse can receive income from the QDOT that is exempt from estate tax.
But there are a couple of extra wrinkles. If your non-citizen spouse withdraws principal from the QDOT, it will be taxed like a distribution from your taxable estate, which can increase estate tax liability. There are also limitations on investments made by QDOTs. In some cases, it could make sense to complement a QDOT with other kinds of transfers to your spouse. Finally, a QDOT can be structured to end if your spouse becomes a U.S. citizen.
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