I found and read you article on lifetime exclusions and annual exclusions dated September 2008. I enjoyed your satire and was wondering if there was a more recent version using the 2009 numbers.
I had a friend tell me his accountant told him his annual exclusions counted toward his lifetime exclusions and you article states otherwise. If you would, I would appreciate it greatly to know where to find the tax code referenced.
Thanks for the article.
Jim Younger
A:
That is very scary; that a professional tax advisor could be so off on such a basic principle of gift and estate taxation.
I updated my page on the Gift Tax to reflect the new $13,000 annual exemption. I also added links to download the IRS instructions for the 706 and 709, which should give you more detailed info.
Basically, if you look at the actual 709, you will see that it deals with “Taxable Gifts” when accounting for the lifetime exclusion and how much has already been used up. Annual gifts of under the exclusion amount are simply not classified as Taxable Gifts and thus do not affect the lifetime exclusion.
Before deciding on any gifting scenario, you need to work with a professional tax advisor who understands these concepts.
Good luck.
Kerry Kerstetter
Posted in Gifting | Comments Off on Gift tax exclusions
Hi – Very helpful information on the web. I have one quick question – if my company is a C Corp and has a loss can I deduct that on my 1040? Thanks!!
A:
No.
An S corp can possibly have its losses flow through to your 1040, but a C corp doesn’t work that way.
Setting up a corp without understanding how it works was very foolish and dangerous. You need to get with a professional tax advisor ASAP to straighten things out before you do any more damage.
Good luck.
Kerry Kerstetter
Follow-Up:
Its kind of you to respond but there is no need for that demeaning attitude.
My reply:
I’m sorry if I offended you, but I assure you that it is for your own good.
I have long had a reputation for telling it like it is and not sugar-coating the truth. Anyone writing to me for advice can expect that kind of response.
In your situation, it is obvious that you, as do may other business owners, jumped into setting up a corporation all by yourself without consulting with knowledgeable professionals. The consequences of this reckless and irresponsible act can be very expensive as you most likely have already violated all kinds of tax and legal requirements.
For your own sake, you need to start working with a qualified tax pro ASAP before you get yourself into more trouble.
Good luck.
Kerry Kerstetter
Posted in corp | Comments Off on Yet another clueless corp owner
Actor Robert Davi has an interesting piece in the Washington Times, where he tries to make the case for allowing pets to be claimed on tax returns as dependents the same as children. While this would be great for those of us who have a lot of animal companions and no human kids, anyone can see that it hasn’t a snowball’s chance in hell of becoming reality.
The definition problems alone would make it impossible to control. If only dogs and cats are allowed to be claimed, the cries of discrimination from owners of other kinds of pets would be deafening. Critters such as birds, fish, snakes, horses, and sheep can all provide the same benefits as Mr. Davi describes.
Another big mess would be the need to assign Social Security or other identification numbers for each dependent animal. It was a reality that after IRS started requiring SSNs to be shown for dependents, the number of claimed dependents magically dropped dramatically; so that is a necessity.
Posted in Dependents | Comments Off on Pets as deductible dependents?
Thanks to Jonah Goldberg at NRO for pointing out this effective video showing the increasing tax burden on the “evil rich” and how everyone making over $250,000 is expected to be patriotic and fork over even more of their money to Bozo Biden and his comrades in DC.
Posted in Uncategorized | Comments Off on Telling the tax story…
Tax Guru - Ker$tetter Letter 