House Passes Senate Budget Bill Convincingly: We Have A Tax Deal!

Well, color me surprised. The House voted on the budget after all, and they voted up or down, rather than amending the Senate bill. The House voted “Yea” and they did so quite convincingly (257 YEA to 167 NAY). Here’s what the bill does: Income tax The tax cuts were extended – permanently – for all but those at the top. For this purpose, the top means $400,000 for individual filers and $450,000 for married couples. The top tax rate will increase to 39.6% from 35%. The Pease and PEP (personal exemption phaseout) restrictions on limitations were also extended. The …

IRS Announces Increase In Annual Exclusion For Gifts, Rest Remains a Mystery

Nobody has a crystal ball. I’ve sat through presentation after presentation (and given a couple myself) on the state of the federal estate and gift tax for 2013 and beyond. There are all kinds of theories about what might happen. But the reality is, we know very little. Quite frankly, much of it hinges on what happens in November. And no, I’m not talking about the presidential election. Realistically, although the President may claim to drive policy when it comes to the federal estate and gift tax, he doesn’t. Congress does. So let’s talk about what will happen if nothing …

Federer’s Wimbledon Win Pays Off For Some In Britain

While many across Britain were devastated last week by Roger Federer’s victory at Wimbledon over hometown darling Andy Murray, others had something to celebrate: money for charity. In 2003, Nick Newlife (no, I’m not making up his name) placed a £1,520 bet that Roger Federer would win the Wimbledon crown seven times by the year 2019. Not coincidentally, 2003 marked the year that Federer won his first Grand Slam singles title at Wimbledon, beating Australian tennis player Mark Philippoussis. With only one win under his belt, Federer’s odds of collecting seven wins weren’t remarkable: a mere 66-1. That feat had …

Obama’s Budget Proposal: What’s Old Is New Again

You don’t grow up as a middle child without learning a few tricks of the trade. One of the most notable: if you have something to say that you know won’t go over very well, you wait until there’s a distraction. And with two brothers, there was always a distraction. This week, President Obama (who is an only child) employed the middle child “act while they’re distracted” strategy, by announcing his plan for the 2013 budget in the midst of Congressional infighting over the payroll tax cuts and Republican squabbling over the nominee. It’s genius. Practically nobody noticed the budget. …

What’s Mine is Yours: IRS Issues Estate Tax Portability Guidance

Last December, Congress pushed through a whole set of changes meant to make them look good on Election Day things easier for taxpayers. One of the changes was the new portability provision which allows spouses to “share” their federal estate tax exclusion amounts with each other. Each person is allowed an exclusion for federal estate tax purposes (it’s $5 million for 2011) which, traditionally, was wasted if not used up. That made for some jumping through hoops on the part of taxpayers in terms of retitling property to equalize estates and creating trusts in order to preserve the exemption amounts. …

IRS Issues Extension for Form Not Yet Available (Thanks?)

If you lost a loved one in 2010, my sympathies are with you. If you lost a loved one in 2010 that might have a taxable estate, my sympathies are really with you. The “surefire vote getting” one year repeal of the federal estate tax for 2010 has turned into one of the biggest administrative nightmares that tax practitioners have seen in awhile. And now, more than 9 months after the “repeal” ended, the IRS finds itself in the position of offering guidance and extensions – and adding to the confusion – on the tax. Let me get you up …

IRS Releases Guidance (But No Form) for 2010 Estates

Whew. It has taken awhile but the IRS has finally issued guidance for the treatment of basis for certain estates of decedents who died in 2010. As you’ve probably heard, there was no federal estate tax due for decedents who died in 2010. Well, er, sort of… Under the Economic Growth and Tax Relief Reconciliation Act of 2001, the federal estate tax was repealed for 2010, implementing a set of confusing carry over basis rules instead. The federal estate tax was slated to come back in 2011 under the old rules. However, the last minute tax deal under the Tax …

If At First You Don’t Succeed: Another Vote Scheduled for Tax Deal

This one isn’t going down without a fight. After Democrats in Congress publicly defied President Obama by refusing to endorse the tax deal he negotiated with Republicans, the measure is going to another vote. On Monday, the Senate will take up a procedural vote to attempt to bring the deal to the floor. In response, Democrats have threatened a filibuster (note to Sen. Harry Reid: Might I suggest reading aloud from the Tax Code?). However, yesterday, a test vote seemed to indicate that it would be easy to get the 60 votes needed to overcome a filibuster. The House, however, …