Alerts & Updates
In Revenue Procedure 2021-45, the IRS announced its inflation adjustments to key figures for the calendar year 2022. For the first time in several years, the annual exclusion from gift tax will increase from $15,000 to $16,000 per year per donee effective January 1. 2022.
This annual update summarizes the current status of the estate and gift tax rates and exemptions at the federal and state levels (Connecticut, New York and Florida) and highlights key provisions of these important state law developments.
Governor Cuomo and New York legislators recently announced an agreement on New York’s budget that includes a significant increase for the income tax rates that will be charged against New Yorkers with high levels of income. The bill is expected to pass.
With the recent passage of the American Rescue Plan, President Biden’s $1.9 trillion stimulus package, it is natural to consider what kind of revenue generating legislation may be coming in the next months and years in order to pay for what has now been three separate rounds of stimulus bills to address the challenging economic conditions brought on by the Covid-19 pandemic.
What will happen to estate, gift and generation-skipping transfer tax exemptions in 2021 and beyond?January 21, 2021
With the inauguration of President Joe Biden and a congress narrowly controlled by the Democratic party, many clients and estate planners have begun to worry about what, if anything, will happen to the federal estate, gift and generation-skipping transfer (“GST”) tax exemptions and rates in 2021 and beyond.
On December 15, 2020, Governor Cuomo signed into law a bill changing New York’s durable power of attorney statutory form. The goal was to simplify the form and alleviate practical problems that result from the current statutory form.
On July 31, 2020, the Internal Revenue Service issued proposed regulations regarding taxation of an “Applicable Partnership Interest” or API, under Internal Revenue Code (IRC) section 1061, clarifying and elaborating on the taxation of API (including items such as carried interest). In 2017, under what is commonly known as the Tax Cuts and Jobs Act, Congress enacted IRC 1061.
2020 was an especially challenging period. An unprecedented COVID-19 pandemic, a world-wide health crisis, associated disruptions to businesses and the global economy, and a bitterly divided election created stress and uncertainty throughout the year.
The Tax Cuts and Jobs Act (“the 2017 Tax Act”) limited individuals to a $10,000 cap on deducting individual state and local taxes paid in a calendar year, starting in 2018 and set to sunset by 2026.
In Revenue Procedure 2020-25, the IRS announced the inflations adjustments for the estate and gift tax exemptions and annual exclusions.