Tag Archives: gifts

Obama’s 2016 Budget Proposal: Part 2 Gift and Inheritance Provisions

President Obama's 2016 Budget ProposalPresident Obama’s 2016 Budget Proposal for individuals which was recently released, and was presented in Part 1. The blog noted an increase to the taxes on higher-income taxpayers, as well as provide tax breaks for low-to middle-income taxpayers. This week we will discuss some highlights of the President Obama’s 2016 Budget Proposal that would impact individuals and small businesses regarding gifts and inheritance tax provisions. As we mentioned before, please remember, these are proposals only.

If you did not get the chance Part 1, you can click here.

Gift and Inheritance Tax Provisions

Inheritances and Gifts:

  • Would eliminate the current step-up in tax basis at death.
  • Require payment of capital gains tax on the increase in value of securities at the time they are inherited.
  • Generally, a $100,000-per-person, portable-between-spouses exclusion would apply for inherited appreciated assets. This would also have exceptions for surviving spouses, small businesses, charities, and residences, among others.
  • For couples, no tax would be due until the death of the second spouse.
  • No tax would be due on inherited small, family-owned-and-operated businesses unless and until the business was sold. Also, unless any closely held business would have the option to pay tax on gains over 15 years.
  • Couples would have an additional $500,000 exemption for personal residences ($250,000 per individual). This exemption would be automatically portable between spouses.
  • Tangible personal property, other than expensive art and similar collectibles, would be tax-exempt (e.g., bequests or gifts of clothing, furniture, and small family heirlooms).

Inheritance and Gift Tax:

  • Would reinstate the prior, 2009, estate and gift tax rates with lower exclusions (generally at 45% at $3.5 million for estates and $1 million for gifts).

A final reminder, that these are all proposals by the Obama administration and must be approved by Congress. The information is being passed along so you will have an idea of what might happen in the future.

In Part 3 we will put up Obama’s 2016 Budget Proposal for Business Provisions.

Do you have any questions about President Obama’s 2016 Budget Proposal?

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Getting Married? See What Can Be Tax Deductible

Category: Deductions
Tags: donations, gifts
Getting Married?
These days weddings can easily break the piggy bank. But you can help to defray some of your costs with careful planning. There are tax write-offs that you can take advantage of, if you take the right steps.
Do you anticipate wearing your wedding gown again?
Most hope not, so why not donate it? Consider bridesmaid and flower girl dresses as well. There are many charitable organizations that would be happy to receive them, and not only will someone else take pleasure in them, but you will be able to use the donations as a tax deduction.
Where are you having your service?
If in a church, and, if you are paying a fee, check to see if the fee can be waived for members who contribute over a certain amount. It could be worthwhile to up your donations for the year to qualify for the waived fee. Donating to a good cause makes you feel good as well as help with tax deductions.
Where are you having your reception?
If you pick a non-profit location for your ceremony or reception, that’s another tax deduction. Places like museums, historic homes or buildings, or publicly owned parks usually use the money for maintenance and preservation. But before you book, make sure you verify that the location is a non-profit.
Want your gifts to give?
Set up your gift registry through the IDoFoundation. A percentage of the cost of each gift purchased through the foundation will be given to the charity you choose. The IDoFoundation has selected charities that ‘promote social change in underserved communities’. Couples can find a list of charities and guests can find a list of participating stores on the foundation’s Website.
Looking for something unique to give your bridal party attendants?
Considering the cost of weddings, most aren’t able to give extravagant gifts to each participant. So instead, think about donations in their names to their favorite charities? Another tax write-off.
Leftover food from the rehearsal dinner or wedding meal?
Donating items to a food pantry, rescue mission, shelters, or other non-profit organizations can provide a nutritious meal, and can help aid with food budgets. But, while this is another donation to write off, there are definitely items that you can’t donate such as opened food items, or personally wrapped meats. Check first with the charity to see what they can accept and have a volunteer standing by for delivery.
Done with your flowers?
Don’t let them wilt without anyone enjoying them. Donate them to a nursing home, hospital, or other care facility to help cheer up the elderly or patients receiving medical treatment. Not only will it make you feel good, but can also help with taxes.
Receipts, receipts, receipts
To substantiate your donation claims with the IRS, make sure you have the receipts from the charitable organizations, and hold on to the contract with your wedding venue, along with the payment receipt.
While these deductions won’t cover the cost of your wedding, they can at least take some of the sting out of your taxes.
Get guidance from you tax preparer and ask about filing jointly.

These days weddings can easily break the piggy bank. But you can help to defray some of your costs with careful planning. There are tax write-offs that you can take advantage of, if you take the right steps.

Do you anticipate wearing your wedding gown again?

small__11422721263-300x189Most hope not, so why not donate it? Consider bridesmaid and flower girl dresses as well. There are many charitable organizations that would be happy to receive them, and not only will someone else take pleasure in them, but you will be able to use the donations as a tax deduction.

Where are you having your service?

If in a church, synagogue, or other place of worship, and if you are paying a fee, check to see if the fee can be waived for members who contribute over a certain amount. It could be worthwhile to up your donations for the year to qualify for the waived fee. Donating to a good cause makes you feel good as well as help with tax deductions.

Where are you having your reception?

If you pick a non-profit location for your ceremony or reception, that’s another tax deduction. Places like museums, historic homes or buildings, or publicly owned parks usually use the money for maintenance and preservation. But before you book, make sure you verify that the location is a non-profit.

Want your gifts to give?

Set up your gift registry through the IDoFoundation. A percentage of the cost of each gift purchased through the foundation will be given to the charity you choose. The IDoFoundation has selected charities that ‘promote social change in underserved communities’. Couples can find a list of charities and guests can find a list of participating stores on the foundation’s Website.

Looking for something unique to give your bridal party attendants?

Considering the cost of weddings, most are not able to give extravagant gifts to each participant. So instead of giving them doodads, think about donations in their names to their favorite charities? Another tax write-off.

Leftover food from the rehearsal dinner or wedding meal?

Donating items to a food pantry, rescue mission, shelters, or other non-profit organizations can provide a nutritious meal, and can help aid with food budgets. But, while this is another donation to write off, there are definitely items that you cannot donate such as opened food items, or personally wrapped meats. Check first with the charity to see what they can accept and have a volunteer standing by for delivery.

Done with your flowers?

small__4821961570-300x200Don’t let them wilt without anyone enjoying them. Donate them to a nursing home, hospital, or other care facility to help cheer up the elderly or patients receiving medical treatment. Not only will it make you feel good, but can also help with taxes.

Receipts, receipts, receipts

To substantiate your donation claims with the IRS, make sure you have the receipts from the charitable organizations, and hold on to the contract with your wedding venue, along with the payment receipt.

While these deductions won’t cover the cost of your wedding, they can at least take some of the sting out of your taxes.

Get guidance from you tax preparer and ask about filing jointly. If you don’t have a tax preparer, feel free to contact us, one of our staff would be happy to answer any questions you may have.

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photo credit: Armando G Alonso via photopin cc
photo credit: Vicky Hugheston via photopin cc
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