Tax Guru – Ker$tetter Letter

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Archive for September, 2015

Trump Flunks Basic Taxation Knowledge

Posted by taxguru on September 17, 2015

As I have pointed out for decades, the progressive tax rate structure that punishes (and thus discourages)success in this country has always been a plank in Karl Marx’s Communist Manifesto

Plank 2. A heavy progressive or graduated income tax.

For Donald Trump to not know that fact and in fact, defend this punitive tax rate structure, is unconscionable for someone who claims to be the country’s most powerful and knowledgeable capitalist.

Trump explains to GOP rivals that taxing rich is not socialism

Trump’s claim that because we have had graduated tax rates in this country for a long time automatically means that it isn’t socialistic is ridiculous.  Ben Carson most definitely wins this portion of the debate by calling out the socialist nature of graduated (aka progressive) tax rates. 

Posted in Commies, TaxRates, Trump | Comments Off on Trump Flunks Basic Taxation Knowledge

Tax Refugees

Posted by taxguru on September 13, 2015

While I have dealt with several clients over the past 40 years who have relocated between States in order to reduce their tax burdens, a growing strategy is with those who are actually choosing to leave the USA entirely, as described in this article.

Expatriates choosing to leave the U.S. rather than pay taxes

Depending on the results of the 2016 elections, we could easily see an even larger increase in the number of people taking this step rather than continue to be fiscally raped by short-sighted Rulers who see no problem in squeezing their Golden Geese until they can no longer exist.  Atlas Shrugs.

Posted in Uncategorized | Comments Off on Tax Refugees

Fighting Back Against New Taxes

Posted by taxguru on September 11, 2015

With the dumbing down of our nation’s kids and almost non-existent teaching of American history in public schools, I doubt that very many people recall learning about the infamous 1773 Boston Tea Party, where the colonists protested new taxes on tea

It’s all too rare nowadays when citizens of this country actually take a stand and don’t just bend over and let their supposed Rulers stick another new tax up their rear ends.

I hope the action taken by this group in Chicago are followed all over the nation to at least slow down the growth of Big Brother taxes. 

Chicago sued over ‘amusement tax’ on streaming services Netflix, Spotify

Posted in Uncategorized | Comments Off on Fighting Back Against New Taxes

Gifting via Debt Forgiveness

Posted by taxguru on September 2, 2015

From a Client:

Subject:  Accounting for Girls’ Inheritance "Forward"

Kerry:

Our plan is to loan our daughter and her husband $140,000. Annual payments will be their annual "gifts".  Their loan will be secured by a mortgage on their land and secured by a note @ zero interest. Their closing is soon.

Problem? Or problems?

 

My Reply:

You are on the right track here.  I’m assuming you are trying to work with the annual tax free gifting exclusion, which is currently $14,000 per donor (giver) per donee (recipient).

You just need to be sure to call the $140,000 a loan in your books and on your kids’.

Each calendar year, you can forgive $56,000 of principal as gifts from you and your wife to your daughter and to her husband.  A letter explaining this each year would be perfect documentation, as would recording it as such in your personal books.  This assumes there haven’t already been other large gifts that would count towards the $14,000 annual limit.  If so, you can just reduce the debt forgiveness by enough to keep the year’s total at no more than $14,000.

Some other relevant trivia:
The gifting limits are done on a calendar year basis.

You don’t need to wait a full year from the date of the loan to make the first debt forgiveness gift. It just needs to be before midnight on December 31, 2015.  Technically, you can give the second one on January 1, 2016.  However, if you do that, you won’t be able to give any more large gifts for the rest of 2016 and stay under the annual limit.

Every few years, the annual limit is bumped up by $1,000 when the cost of living warrants it.  It was last raised to $14,000 as of 2013.  When it is increased to $15,000 in the next year or two, you can increase your annual gifts accordingly.

I hope this info isn’t too confusing and is useful for your gifting plans.  Let me know if you have any questions.

Kerry

Follow-Up:

Thanks. Perfect advice.

TaxCoach Software: Are you giving your clients what they really want?

Posted in Gifting | Comments Off on Gifting via Debt Forgiveness

State Tax Rates Vary Widely

Posted by taxguru on September 1, 2015

The different tax rates levied by the various States have long been part of the tax planning analyses I have done for clients.  Occasionally, this has resulted in shifting some operations and income into lower tax States in order to save thousands of dollars a year in taxes.

 

Taxpayers Fleeing Democrat-Run States for Republican Ones – From Americans for Tax Reform

 

The Tax Foundation has just released a very comprehensive study of the effective tax burdens on several different kinds of business in each of the American States, plus DC.  They even contrast the tax rates for newer businesses versus more mature ones. The report is free to download and is an interesting tool for those considering the possibility of reducing their State tax burdens. 

The  article explaining the report

The report itself – 128 page PDF

 

TaxCoach Software: Finally! Plain-English Tax Planning That Builds Your Business!

Posted in StateTaxes | Comments Off on State Tax Rates Vary Widely