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Income Tax

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The U.S. Exit Tax

Bye-Bye U.S., Hello Exit Tax! If you are a U.S. citizen thinking about relinquishing your U.S. citizenship, or if you are what is defined as a “long-term” green card holder and thinking about giving it up, you may be in for a surprise. The U.S. has a sinister parting gift for you, called an “exit…

Taxation of Trusts

How Trusts are Taxed We can talk hours about the intricacies of trust taxation, but here are some basic concepts that will still go a very long way when it comes to how trusts get taxed. Trusts get taxed in two different ways: a grantor trust, and a non-grantor trust. Grantor Trust A grantor trust…

Dynasty Trusts

This is a part in a series of articles I have written on various types of irrevocable trusts. What is a Dynasty Trust? Many people refer to dynasty trusts to mean an irrevocable trust that is built so that after the death of the grantor, the trust benefits the grantor’s descendants.  I don’t disagree with this…

Sales to IDGTs

This is a part in a series of articles I have written on various types of irrevocable trusts. Intentionally Defective Grantor Trust What is a sale to an Intentionally Defective Grantor Trust (IDGT)? Why would a trust be “intentionally defective”? And what is so popular about this strategy? Intentionally Defective Grantor Trust An IDGT is a…

AB150: What you need to know to save on taxes

On July 16, 2021, Governor Gavin Newsom signed Assembly Bill 150 into law. This bill enables certain California taxpayers to write off more than the $10,000 limit placed on state and local tax (SALT) deductions — but it’s not automatic, you need to know what to do to get this relief. BRIEF HISTORY OF SALT…

What is an ILIT?

This is a part in a series of articles I have written on various types of irrevocable trusts. Irrevocable Life Insurance Trusts Why set up an irrevocable life insurance trust (ILIT)? An irrevocable life insurance trust (referred to as an ILIT) is a type of irrevocable trust that typically is used to own life insurance policies…

How Step-Up in Basis Works

The concept of step-up in basis is a staple in estate planning.  Planning decisions must take this concept into account, as the potential benefits of preserving step-up in basis for your heirs is tremendous. The step-up in basis is a method around paying capital gains taxes, which is a form of income tax. Generally, if…

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