Latest news with #taxliability
Yahoo
3 days ago
- Business
- Yahoo
Top 5 Estate Planning Strategies To Avoid ‘Great Wealth Transfer' Taxes
The United States is about two years into a Great Wealth Transfer that will see an estimated $84.4 trillion in assets pass from older to younger generations by 2045. Generational wealth preservation is a priority for many of these families, and for some, minimizing tax liability is an important way to achieve it. Trending Now: Learn More: Several types of tax can impact wealth transfers. They include estate tax (40% in 2025), as well as capital gains tax on appreciated assets and ordinary income taxes on tax-qualified accounts, according to Matthew Chancey, Certified Financial Planner and author of 'Tax Alpha Solutions: Effective Tax Management Strategies For High-Net-Worth Investors.' In 2025, estate tax only applies to estates that exceed $13.99 million ($27.98 for married couples) in fair market value, per the IRS website. Beginning next year, the exemption increases to $15 million, according to the Tax Foundation. However, Chancey noted even if your estate isn't impacted by estate tax, your heirs could still have capital gains and income tax to deal with. GOBankingRates spoke with Chancey and other financial advisors about the strategies they use to help their clients minimize taxes on transferred wealth. Take Advantage of Step Up in Cost Basis 'One of the best parts of the tax code is called 'stepped up cost basis at death,' which means when our parents pass on and leave assets to us as heirs […] capital gain taxes can be avoided since the assets are now considered to have stepped up their cost basis to current FMV [fair market value], thus eliminating any capital gains,' Chancey said. You can use this strategy for a variety of appreciating assets, including taxable brokerage accounts and real estate. To visualize how this works, say the cost to acquire your home (its cost basis) was $200,000, and its fair market value is $400,000 now. If you gift the home to your child and they later sell it for $500,000, they'll pay capital gains tax on $300,000 ($500,000 less the $200,000 cost basis). If, on the other hand, they inherit the house and sell it for $500,000, they'll only pay capital gains tax on $100,000 — $500,000 less the stepped up basis of $400,000. Consider This: Reconsider Joint Ownership Some families like to jointly title property as a means of estate planning, according to Allison Harrison, founder and principal attorney of ALH Law Group, which specializes in estate planning for the LGBTQ+ community. However, this approach is problematic. 'The property is now subject to all the owner's creditors, and the survivor does not get a step-up in basis for capital gains purposes,' Harrison said. Take Out Permanent Life Insurance 'Life insurance is a great way to provide access to capital today, but grow it in a tax free way for the beneficiaries,' Harrison told GOBankingRates. A properly structured whole life policy, for example, is a permanent life insurance policy that can accrue interest on a tax-deferred basis and earn dividends tax-free, per Guardian. Under most circumstances, your beneficiaries won't have to pay income tax on insurance money that passes to them directly, in one lump sum, according to the IRS. Keep Gifts at $19,000 per Year or Less You pay gift tax of up to 40% if your gifts exceed the lifetime limit of $13.99 million (for 2025). For tax year 2025, gifts of up to $19,000 per year, per recipient, don't count toward the lifetime limit. Nor do they count toward your $13.99 million estate tax exemption, as they do if they exceed $19,000. The rules are the same for the generation-skipping tax on gifts to anyone at least 37.5 years younger than you, per TurboTax. 'Hugely important for people over the $15 million exemption level [for 2026]. That is potentially a double tax without planning,' warned Matthew Wiley of Wiley Law. You can work around the gift limits entirely by paying the recipient's tuition, health insurance or unreimbursed medical bills instead of gifting them cash or other assets. These payments are non-taxable as long as you pay them directly to qualified schools or to insurance companies or healthcare providers, according to Jackson Hewitt. Place Assets in an Irrevocable Trust A trust allows a third party, called a trustee, to hold assets you transfer into the trust for beneficiaries you designate. After you die, the trustee distributes the assets to the beneficiaries, according to Fidelity. An irrevocable trust can't be changed, but it can minimize estate tax and your heirs' income tax liability, while also shielding your estate from creditors and lawsuits. Wiley named the following irrevocable trusts as his favorite strategies for shielding wealth transfers against tax: Spousal lifetime access trust Irrevocable life insurance trust Domestic asset protection trust (available in select states) More From GOBankingRates 7 Luxury SUVs That Will Become Affordable in 2025 This article originally appeared on Top 5 Estate Planning Strategies To Avoid 'Great Wealth Transfer' Taxes Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
06-06-2025
- Business
- Associated Press
Divorced and Facing IRS Collection? Clear Start Tax Outlines How Innocent Spouse Relief Could Save You Thousands
Clear Start Tax Explains How Divorced Taxpayers Can Escape IRS Liability for a Former Spouse's Mistakes IRVINE, CA / ACCESS Newswire / June 6, 2025 / Divorce can be complicated enough without the added stress of IRS debt. Yet every year, countless divorced Americans are shocked to discover they're on the hook for a former spouse's tax liabilities - often for mistakes they didn't know about. According to Clear Start Tax, a leading national tax resolution firm, the IRS's Innocent Spouse Relief program can offer a powerful - and often overlooked - solution. When Divorce Leaves Taxpayers Facing a Former Spouse's Mistakes Many taxpayers assume that a divorce decree automatically separates their financial obligations. But under joint tax returns, the IRS can pursue either spouse for the full amount owed, including taxes, penalties, and interest. That means years after a divorce, one spouse may face wage garnishment, bank levies, or collection notices for a tax bill they had no role in creating. 'We've worked with clients blindsided by IRS letters years after their divorce,' said the Head of Client Solutions at Clear Start Tax. 'Innocent Spouse Relief can be a lifeline in these cases - but most people don't even realize it exists.' Who Qualifies for Innocent Spouse Relief? Clear Start Tax explains that the IRS looks at several key factors when reviewing Innocent Spouse claims: Why the Right Approach Is Essential for Approval While the program offers powerful protection, Clear Start Tax emphasizes that success depends on a careful application and thorough documentation. Missing deadlines, submitting incomplete paperwork, or misunderstanding eligibility rules can lead to denial, leaving taxpayers exposed to the full debt. 'Innocent Spouse Relief isn't just a form-it's a carefully built case,' said the Head of Client Solutions at Clear Start Tax. 'We work closely with our clients to present the strongest possible application, so they can move forward without being burdened by a former partner's tax mistakes.' How Clear Start Tax Helps Divorced Taxpayers Regain Control Clear Start Tax offers a hands-on, strategic approach to Innocent Spouse claims and other tax resolution programs: About Clear Start Tax Clear Start Tax is a full-service tax liability resolution firm that serves taxpayers throughout the United States. The company specializes in assisting individuals and businesses with a wide range of IRS and state tax issues, including back taxes, wage garnishment relief, IRS appeals, and offers in compromise. Clear Start Tax helps taxpayers apply for the IRS Fresh Start Program, providing expert guidance in tax resolution. Fully accredited and A+ rated by the Better Business Bureau, the firm's unique approach and commitment to long-term client success distinguish it as a leader in the tax resolution industry. Need Help With Back Taxes? Click the link below: Contact Information Clear Start Tax Corporate Communications Department [email protected] (949) 535-1627 SOURCE: Clear Start Tax press release
National Post
14-05-2025
- Business
- National Post
Dealings in Securities by an Executive Director and Executive Officer of AngloGold Ashanti plc
Article content LONDON & DENVER & JOHANNESBURG — AngloGold Ashanti plc (the 'Company') (NYSE: AU; JSE: ANG) announces that an Executive Director, Alberto Calderon, and an Executive Officer of the Company, Richard Jordinson, have dealt in securities of the Company. A portion of the shares received by Alberto Calderon have been sold to satisfy related taxes as detailed below. The shares received by Richard Jordinson, who will retire as Chief Operating Officer of the Company and member of the Executive Committee with effect from 1 June 2025 after 13 years in senior management positions in the Company, have been sold, in part to satisfy related taxes. Article content Article content Name of Executive Director Alberto Calderon Name of Company AngloGold Ashanti plc Date of transaction 13 May 2025 Nature of transaction Off-market receipt of vested shares under the 2023 Deferred Share Plans (DSP) Class of security Ordinary shares Number of securities 80,296 Price per security Nil Nature and extent of interest Direct, Beneficial Article content Name of Executive Director Alberto Calderon Name of Company AngloGold Ashanti plc Date of transaction 13 May 2025 Nature of transaction On-market sale of shares to fund tax liability in relation to DSP awards Class of security Ordinary shares Number of securities sold 40,148 Price per security US$40.8845 1 Value of transaction (excluding fees) US$1,641,431.37 Nature and extent of interest Direct, Beneficial Article content (1) Weighted average price. These shares were sold in multiple transactions at prices ranging from US$40.8792 to US$40.9248 inclusive. Article content Name of Executive Officer Richard Jordinson Name of Company AngloGold Ashanti plc Date of transaction 13 May 2025 Nature of transaction Off-market receipt of vested shares under the 2023 Deferred Share Plans (DSP) Class of security Ordinary shares Number of securities 38,346 Price per security Nil Nature and extent of interest Direct, Beneficial Article content Article content Article content Article content Article content Contacts Article content Media Andrea Maxey +61 08 9435 4603 / +61 400 072 199 amaxey@ Article content General inquiries media@ Article content Investors Andrea Maxey +61 08 9435 4603 / +61 400 072 199 amaxey@ Article content Article content
