Rock star David Bowie died of cancer in January at age 69. According to a recent account in TaxNotes, Bowie became a tax exile in 1972. At that time he had accumulated U.S. and California tax debts of some $300,000. As England then had a top marginal income tax rate of 83%, that also was…
Month: February 2016
Digital Estate Planning
Last year, Facebook announced a change in its policy for managing profiles after death. Earlier, the family of a deceased user could ask Facebook to “memorialize” the user’s profile. Now users can designate a “legacy contact” who will have access to the account after the user’s death. The legacy contact will be permitted to post…
Jumbo Gift Tax Exclusions
Every taxpayer has two shields from the federal gift tax: a $14,000 annual exclusion and a $5.43 million lifetime exemption. Each of these is indexed for inflation. To the extent the gift tax exemption is used, one’s estate tax exemption is reduced, dollar for dollar. The purpose of the annual exclusion is to eliminate the…
The tax value of fine art
Bernice Newberger died in July 2009. Her estate included three valuable pieces of art, for which it obtained appraisals from Sotheby’s and Christie’s. The valuation was complicated by the fact that the market for fine art took a steep dive in 2008, as the economy slipped into recession. For example, in October 2008 some 44%…
I need protection for my 401(k) distribution
DEAR GARDEN STATE TRUST COMPANY: When I retire in about a year, I’m expecting a six-figure distribution from my employer’s 401(k) plan. The success of my retirement turns on what I do with this money, and I’m more than a little unsettled by the prospect. What should I do to keep my all my options…
Think hard before tapping your 401(k) balance
One of the features that make 401(k) plans so attractive is that your money is not completely out of reach should an emergency need arise. Most plans allow for loans that are completely tax free if repaid as agreed. (Interest payments will be required, but they will be credited to the account.) In a major…