IRS is cracking down on discounts for transfers of stakes in family firms. Currently, when an interest in a closely held business is transferred to a family member, the donor is able to claim significant valuation discounts for lack of marketability and control, which can substantially reduce the gift tax cost. The transferred interest is […]
Damages paid for wrongful imprisonment are tax-free. Last year’s tax package excludes from taxable income all compensation that an individual receives on account of being wrongfully incarcerated for a criminal offense. Under prior law, such recompense was tax-free only if based on injuries incurred while in prison. Individuals who treated such amounts as taxable in […]
Make the most of your generosity when donating to charitable organizations. Give appreciated assets, such as stocks, real estate or mutual fund shares. Provided you’ve owned the property for more than a year, you can deduct its full value in most cases. And neither you nor the charity has to pay tax on the appreciation. […]
Be sure to not waste the gift tax exclusion. For 2016, you can give up to $14,000 apiece to a child, grandkid or any person without gift tax consequences. If you are married, your spouse can also give $14,000 to the same donee, making the tax-free gift $28,000. These annual exclusion gifts can help save […]
Start mulling over your annual giving plans. There are moves you can make to reduce your tax bill when giving to family members or donating to charity. Some save income tax and others pay off in savings for estate and gift tax. So don’t wait till the last minute.