- Tuesday, 22 January 2019 21:43
Jeanne Calment has been considered the world’s longest lived person since she died at the age of 122 in 1997. She allegedly smoked until she could not light a cigarette without assistance. Recently, a Russian gerontologist and a Russian mathematician have questioned her longevity and floated the theory that Calment stole her mother’s identity for the purposed of avoiding French inheritance taxes in the 1930’s. Their theory is that she did not look or act that old. The result is that Calment was only 99 when she died.
Only three points:
1. I always enjoyed the part of Calment’s bio where she sold her apartment when she was 90 to a man who agreed to pay her a monthly sum until she died. She outlived him by two years so he wound up paying 2X for the real estate.
2. Like many points of French governance, the estate tax laws are complicated. Nonetheless, the tax rates are not so confiscatory that compliance merits identity theft as a means of avoidance.
3. Is there any type of disinformation campaign that Russians will not engage in?
Photo Credit: Reuters
License: Fair Use/Education
- Thursday, 04 October 2018 10:39
The New York Times just published 15,000 words about the estate and gift tax strategies President Trump’s father, Fred Trump, used to transfer his billion dollar real estate empire to his children more than 20 years ago. NYT reporters accessed public records and had others provide them confidential documents such as estate and gift tax returns. The point of the NYT piece is to disprove President Trump’s claim that he is a self-made man by claiming he received $413 million from his dad. They do not note that represents only 1/7 of his current net worth as reported today by Forbes.
A few points:
1. Even though the NYT used the terms “tax dodger,” “sham,” “dubious schemes,” and “improper,” to describe Fred Trump’s planning, the actual planning strategies he used were legitimate.
2. Fred Trump utilized valuation discounts and special trusts called GRATs to greatly reduce the gift and estate taxes owed on the transfer of his assets to his children.
3. Any impropriety on the transfers is due to the appraisal values for the real estate which seemed low in light of later sales.
4. Try as the NYT might to implicate President Trump in any impropriety, any wrong doing belongs to the person making gifts, i.e. Fred Trump, not the person receiving the gifts.
5. Am I the only one to notice that only confidential tax returns of Republicans are leaked to the press?
Photo Credit: Trump Campaign via New York Times
License: Fair Use/Education (from linked article)
- Wednesday, 05 October 2016 14:32
Hillary Clinton announced an updated estate tax proposal today. After previously supporting an increase in the estate tax rate from 40% to 45% and decreasing the amount of tax free assets to $3.5 million, she now wants to tax estates exceeding $10 million at 50%, estates exceeding $50 million at 55%, and estates exceeding $500 million at 65%. She also wants to remove the stepped up basis provision for estates so appreciated assets would also be subject to capital gains tax at death.
Two quick points without being too political because the proposal speaks for itself:
1. Apparently Hillary believes the Senator Warren adage that “you did not build this” so we are going to tax it mantra.
2. No word from her billionaire buddies Soros, Zuckerberg, Gates, and Buffet on how they feel about the government possibly taking 65% of their wealth and, frankly, I don’t give a damn about them.
- Wednesday, 03 August 2016 21:38
Stepping away from celebrities for a minute and focusing on estate laws, yesterday the IRS issued proposed regulations to minimize valuation discounts in estate planning. In a nutshell, the regulations prohibit taxpayers from dividing property between family members and then claiming their proportionate shares are not worth the exact proportion because that small proportion does not have control of the property. Wonky? Yes.
Three small points:
1. These regulations have been bandied about for 25 years.
2. From a practice viewpoint, I have never completely bought into the idea of valuation discounts for marketable securities transferred to an LLC or partnership solely for the purpose of obtaining a reduced value for estate tax purposes.
3. Nonetheless, this issue seems to be one for Congress to address through legislation rather than one more edict from a lame duck (re: imperial) administration to issue in its waning days.
- Monday, 11 April 2016 21:41
David Tepper is a hedge fund manager whose company is located in New Jersey. He is also a resident of the Garden State (misnomer alert). He recently announced that he was moving his corporate headquarters and his personal residence to Florida. The NJ state budget director then stated that this move could affect the amount of tax revenues generated by NJ.
Read more ...