TaxConnections


 
 

Archive for David Ellis

The Case Of The Secret Divorce And The Not So Innocent Spouse

Question:

What do a weekend trip to Mexico, a sneaky spouse, and a tax protest letter have in common?

Answer:

They are all components of a taxpayer’s losing plea for tax relief in front of the California State Board of Equalization.*

THE FACTS

Charles and Vickie Sine filed a joint California resident tax return (Form 540) for tax year 2005.  It subsequently came to the attention of the Franchise Tax Board that they had Read more

Start 2015 Tax Planning Now! Part 4 (Final)

Tax Code Changes Create Challenges

How do you work and coordinate with attorneys and financial planners?

We make it a point to communicate with the client’s attorney and financial planner anytime we see anything of financial or legal significance that has happened or is likely to happen. For example, in some cases, by combining the estate and gift tax exemption with the proper use of certain irrevocable trust, millions of dollars in estate and gift taxes may be avoided. If we see that a client may potentially benefit from this type of strategy, we will work closely with his/her attorney and financial planner to implement a plan.

 

Read more

Start 2015 Tax Planning Now! Part 3

Tax Code Changes Create Challenges

Inheritance taxes and estate planning are a growing concern for affluent baby boomers. What are some of the major issues?

In addition to the double step-up in basis on community property discussed above, the baby boom generation will benefit from some of the most generous estate tax loopholes in history. For example, married couples have complete spousal exemption from estate and gift tax when transferring property to each other. This has not always been the case.

For 2015, every person has a lifetime net gift and estate tax exemption up to $5.43 million. Considering that the top gift and estate tax rate is 40%, this exemption represents an Read more

Start 2015 Tax Planning Now! Part 2

Tax Code Changes Create Challenges

What should partners who married under California’s Equal Marriage Law be concerned about or plan for in terms of taxes?

Same sex marriage is now recognized in California. This means, from a tax perspective, same sex married couples face the same issues as opposite sex couples. They are also eligible to take advantage of what we call the “biggest tax loophole of all time” – the double step-up in basis on community property.

This is a section of the tax code that stipulates when property is held as community property and one spouse dies, the appreciation on the property is not taxed to the Read more

Start 2015 Tax Planning Now! Part 1

Tax Code Changes Create Challenges

What should small business owners focus on for 2015 tax planning?

An  important,  yet  often  overlooked,  issue  for small business owners is the choice of the form of entity under which they operate. For 2015, this will become critical as Congress contemplates major changes to  the  tax  code.  Currently, the maximum   corporate federal tax  rate  is  generally  less  than the maximum individual tax rate. This has led many business owners to consider converting their sole proprietorships and pass through entities (such as S corporations and LLCs) into C corporations, which are taxed at the lower corporate rate. Caution must be exercised before making this change, Read more

Meet Tax Experts At TaxConnections...