< "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> The Tax Prophet
Copyright © 1995-2013 Robert L. Sommers, All rights reserved.
< "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> The Tax Prophet
Copyright © 1995-2013 Robert L. Sommers, All rights reserved.


Estate Planning

Gift-Tax Planning

Gifts by Non-U.S. Citizens or Residents

IRAs, Roth IRAs and Educational IRAs

Asset Protection - domestic and off-shore, foreign trusts

Estate Planning

   Estate Planning Newsletter - basic

Start with the newsletter on estate planning.  This newsletter gives an overview key estate planning concepts such as trusts and wills, community property, stepped-up basis and the Unified Estate and Gift Tax Exemption.

Planning is Key to Estate Taxes - basic

Part one of a two-part newspaper series discussing the basics of estate planning, including wills, trusts, joint tenancy, community property, stepped-up basis and distribution planning for minor children.

Strategies to Minimize Estate Taxes - basic

The second part of the newspaper series involving estate planning.  This article discusses gifts, estate taxes, the Unified Estate and Gift Tax Credit and the Marital Deduction (including the "QTIP" marital deduction).

For an article on how not to plan your estate, read "Chief Justice Blows His Estate Plan" in the November 1995 Hot Topics.

If you think the Chief Justice messed up, the May 1996 Hot Topics analyzes the problems facing a billionaire's estate  -- all because of a defective will!

1997 Estate Tax Changes - basic

The new Unified Gift and Estate Tax Credit amounts and other changes to the estate tax law.

Wills vs. Trusts - basic

An understanding of the differences between a traditional Will and a funded Revocable Trust is important, since these documents will form the basis of your estate plan.   Usually, your tax planning and the disposition of your estate will be controlled by one of these documents.

Revocable vs. Irrevocable Trusts - intermediate

Use of an irrevocable trust is a step above basic estate planning.  These are often used to hold life insurance policies or to provide for the education and needs of children.  Irrevocable trusts are also used by non citizens and residents to circumvent U.S. federal income and estate taxes.

Unfortunately, irrevocable trusts are often touted by trust scam artists for illegal tax evasion purposes.  Read the Trust Scam Bulletin Board for more information,

Unwed But Not Unwise - intermediate

For those living in "non-traditional" relationships (i.e. gay or straight couples who are not legally married), this article describes the income and estate tax implications of their relationship and suggests planning opportunities.

Educational Trusts for Children - intermediate

An FAQ dealing with the mechanics of creating an educational trust for minors.

Inheriting Stocks - intermediate

An FAQ discussing the tax consequences of inherited stock.

Dividing an Inheritance Among Family Members - intermediate

An FAQ (11/01) discussing the gift-tax consequences of dividing an inheritance differently than stated in the will (or trust).

Joint tenancy property - intermediate

An FAQ involving joint tenancy and the income and estate consequences thereof.

Bank and Brokerage Accounts Held in Joint Tenancy - intermediate

An FAQ discussing when a gift occurs when a joint tenant is added to a bank or brokerage account.

Joint Tenancy and Estate Taxes - intermediate

Another FAQ regarding the estate tax consequences of holding property in joint tenancy.

o Income in Respect to a Decedent and the Qualified Residence Trust - advanced

Income in respect to a decedent is a difficult concept, but it applies to many types of distributions.  The qualified residency trust is an advanced estate planning technique that should be considered under the right circumstances.

June 25, 2000 - Variable Annuities vs. Mutual Funds: Which is Better? - intermediate

An FAQ discussing variable annuities, part 2 of 2-part series

June 11, 2000 - Variable Annuities Receive Scrutiny - intermediate

An FAQ about variable annuities and how they compare to direct stock investments, part 1 of 2-part series

September 3, 2000 - Placing a Residence in an Irrevocable Trust - intermediate

An FAQ warning of the pitfalls of placing your residence into an irrevocable trust.

September 17, 2000 - Repeal of the Estate Tax - intermediate

An FAQ analyzing the Republican proposal to eliminate the estate tax and the consequences for California taxpayers.

October 1, 2000 - Proposals to Fix the Current Estate Tax System - intermediate

        An FAQ recommending changes in the estate tax system.

Estate Taxes Involving a Joint Tenancy Brokerage Account - intermediate

An FAQ discussing the estate-tax consequences of a joint tenancy brokerage account

Joint Property as Part of an Estate - intermediate

 An FAQ (9/01) discussing the estate-tax rules of joint tenancy.

Who Pays Estate Tax When Surviving Spouse Dies? - intermediate

An FAQ (4/02) discussing the payment of estate tax at the death of the surviving spouse.

Transfer of Residence to Revocable Trust - intermediate

An FAQ (4/02) involving the transfer of a residence into a living trust.

Gift Tax Planning

Gifting Stock Shares - basic

A basic description of the gift tax rules and how they apply to a gift of stock.   Also, the income tax consequences for the donee when the stock is sold.

Gifts to Minors Using Custodial Accounts - intermediate

A FAQ on how to gift property to minor children using the Uniform Gifts to Minors statutes.

Tax Consequences of Gifts to Minors Using Custodial Accounts - intermediate

An in depth Hot Topics article dealing the custodial accounts and gifts to minors.

o Year-End Tax Planning, 1997 - advanced

Discussion about gifting property to take advantage of "fractional interest" discounts, thereby creating a larger gift.  Several other gift tax planning opportunities are described as well.

o Year-End Tax Planning, 1998 - advanced

Discussion on changes in the law for 1998.

October 3, 1999 Joint Bank Accounts - intermediate

FAQ regarding whether adding a beneficiary to a bank account causes a gfit.

March 19, 2000 - Gifts of Bonds with Accrued Interest - intermediate

An FAQ dealing with the taxation of accrued interest when a bond is gifted.

September 3, 2000 - Transferring Money to a Relative's Account - intermediate

An FAQ involving the transfer of funds into a relative's account and the property party to claim the gains or losses from the account.

Sale of Vacant Land Received as a Gift - intermediate

An FAQ dealing with the sale of property which has a carryover basis.

Gift of Automobile to Parent - intermediate

An FAQ dealing with the gift-tax consequences of gifting an automobile to a parent.

Gifts by Non-U. S. Citizens or Residents

o Foreign Taxpayers Beware: U.S. Estate and Gift-Tax Law Can Hit Wallet Hard  - advanced

    Hot Topics (10/01) article describing estate and gift-tax consequences for transfers made by non- U.S. taxpayers.

Estate and Gift Transactions for Foreign Taxpayers - intermediate

A different set of rules regarding gifts and estate taxes apply to foreign taxpayers.   One key issue is whether a person is considered foreign for gift and estate tax purposes.

1996 Tax Law Changes Affecting Foreign Gifts - intermediate

A new set of rules became effective in 1996.  There are now stringent reporting requirements for foreign gifts received by U.S. residents or citizens.

o Gifting Stock to an Individual Compared with a Foreign Trust - advanced

This article compares the tax consequences of a foreign gift of stock made to an individual U.S. citizen or resident vs. a gift to a foreign trust in which the U.S. individual is a beneficiary.

Inter-related Gift Transactions Between U.S. and Foreigner - intermediate

An FAQ discussing the step-transaction as applied to a gift transaction between a U.S. taxpayer and a foreigner.

Gift by NRA of California Home - intermediate

The gift-tax consequences involving the transfer by an NRA of his U.S. vacation home.


IRAs, Roth IRAs and Educational IRAs

The Taxpayer's Relief Act of 1997 - basic

An introduction to the 1997 tax law changes affecting IRAs, and a description of the new Roth IRA and Education IRA.

Retirement Accounts and Estate Taxes.  - intermediate

March 1998 Hot Topics: A discussion of the 1997 changes involving retirement accounts and estate taxes.  A discussion of planning opportunities under the new tax laws.

Early Withdrawal from an IRA - intermediate

A November, 1996 FAQ discussing the tax consequences of an early IRA withdrawal.

Early IRA Withdrawals - intermediate

May,1999 FAQ dealing with the rules regarding early IRA withdrawals.

The Roth IRA - intermediate

A discussion of the Roth's advantages compared with a traditional IRA and whether you should convert your IRA to a Roth.  Links to Roth IRA conversion calculators are included.

Roth Rollover; Roth vs. IRA - intermediate

Two FAQs involving a Roth rollover and when to choose a Roth over an IRA.

 Taxation of Roth Rollover and  Roth Holding Period Rules - intermediate

Another two FAQ's dealing the new Roth IRA rules.  

Roth Rollovers and the Minimum Distributions Rules - intermediate

Also FAQ's involving, Roth 4-year averaging; tax vs. tax exempt portions; and whether a rollover from a SEP is permitted.

Multiple IRA to Roth Rollovers - intermediate

The IRS rules regarding multiple conversions from an IRA to a Roth and back.

  Using an IRA to Fund  a vacation residence - intermediate

An FAQ (10/01) involving the rules regarding the use of IRA funds and a home purchase.

  Bank Refuses to Correct IRA Contribution Mistake - intermediate

An FAQ (10/01) dealing with how to correct a bank mistake involving an IRA.


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All contents copyright ? 2008 Robert L. Sommers, attorney-at-law. All rights reserved. This internet site provides information of a general nature for educational purposes only and is not intended to be legal or tax advice. This information has not been updated to reflect subsequent changes in the law, if any. Your particular facts and circumstances, and changes in the law, must be considered when applying U.S. tax law. You should always consult with a competent tax professional licensed in your state with respect to your particular situation. The Tax Prophet(TM) is a trademark of Robert L. Sommers.