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was signed December 22, 2017 by president Donald Trump.
Coming late in the tax year, the passing of the tax law changes leaves little time to make smart tax moves before year end.
The following is a list of 7 popular tax planning moves you can make before year end and in 2018 to save money and reduce taxes. Please note that this is a general list of tax planning strategies and you should speak with our tax experts to see if you qualify for any of the following tax planning strategies.
If you have any questions please contact us and speak with one of our tax experts. 800-425-0570 or email contact@MrSmartTax.com
Written by Michael R. Arrache CPA, EA
December 23, 2017
While tax day might be a terrible day for some, there are some freebies out there that you can take advantage of. Read more here…
Per the guidance of Senate Finance Committee ranking member Ron Wyden, Oregon-Dem, the IRS is being urged to establish a better system of collecting corporate taxes that are owed, but not paid. Wyden hopes to improve the collection of corporate taxes and is leading an investigation into the IRS collection efforts during next weeks budget hearings with the U.S. Treasury Department. Read more here…
Did you inherit real estate from a deceased spouse? The internal revenue code has special tax treatment for valuing the basis of inherited property regardless if you have estate tax filing requirements and no doubt this will impact you.
If the inherited property has appreciated in value, the surviving spouse will generally receive a step up in basis of the inherited property to the fair market value (FMV) at:
1) the date of decedent’s death or
2) on the alternate valuation date (within 6 month of the date of death).
Further, in community property states (i.e. California, Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), married individuals are typically considered to each own 50% of the community property. As such, when either spouse dies, the entire value of the community property, including the part owned by the surviving spouse, receives a step up in basis to the FMV. For this rule to apply at least 50% of the value of the community property must be included in the deceased spouse’s gross estate regardless if the deceased spouse’s estate must file a estate tax return.
These rules can come in handy when a surviving spouse is in need of liquid capital. It should be noted that this special tax treatment can have adverse consequences if not handled correctly. Consult your tax adviser for more information.
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