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Are You a California Resident?

Are You a California Resident?

Many people believe that as long as they are outside the state of California for six months and a day they are not residents of California. And thus don’t have to pay California’s high income taxes. But the state of California is both broke and arrogant. And they make the rules the way they want.

Design Your Asset Protection Plan

Design Your Asset Protection Plan

You design a lot of things in your life. The layout of your house, the flow of your business, the requirements on your children, and many more scenarios are all elements of conscious design. Asset protection is no different. There is an architecture, a cohesive...

Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

Estate and Gift Tax Exemptions Increased for 2018

tax photo

The Internal Revenue Service (IRS) just announced new rules for 2018.

First, the estate tax. In 2017, an individual could pass with $5.49 million in assets and not be subject to any federal estate tax. This amount is doubled for married individuals (or $10,980,000.) For 2018, this exemption amount has been increased to $5.6 million, or $11.2 million for marrieds. That is a lot of money to pass on tax free to your heirs. For context, in 1998 the estate tax exemption was only $625,000. The gift tax is assessed on gifts made during the year (as opposed to at your death). In 2017, an individual could gift $14,000 of assets to anyone without having to report the gift to the IRS on a tax return. There is no upper limit on the number of individuals you can gift money or assets to during your life. Grandpa Eddy can gift $14,000 this year to his ten grandchildren and get $140,000 out of his estate. For 2018, the gift tax exemption is $15,000. No gift tax return is required for gifts up to this amount. So now, Grandpa Eddy and Grandma Edna could each gift $15,000 to their 10 grandchildren and get $300,000 ($15,000 times 2 gifters times 10 grandchildren) out of their estate. Of course, with the estate tax exemption now at $11.2 million the need for couples to gift away assets during your lifetime to avoid a large estate tax at their death is somewhat diminished. One other tax change of note for 2018 is the Social Security wage base for computing payroll taxes. In 2017, this amount was $127,200. For 2018, it moves up to $128,400. Best wishes for the holidays and for a prosperous 2018!
Are You a California Resident?

Are You a California Resident?

Many people believe that as long as they are outside the state of California for six months and a day they are not residents of California. And thus don’t have to pay California’s high income taxes. But the state of California is both broke and arrogant. And they make the rules the way they want.

Design Your Asset Protection Plan

Design Your Asset Protection Plan

You design a lot of things in your life. The layout of your house, the flow of your business, the requirements on your children, and many more scenarios are all elements of conscious design. Asset protection is no different. There is an architecture, a cohesive...