Orsbon & Fenninger, LLP

Estate Planning and Estate Administration

704-900-3883 Phone
888-314-8134 Toll-Free

estate tax Archives

Estate tax rules withdrawn by the Treasury Department

Small business owners in North Carolina may breathe a sigh of relief upon learning that the proposed valuation rules for family businesses will be withdrawn by the Treasury Department. The rules were proposed in August 2016 and would have greatly limited discounts in value that business owners claim in order to pass their businesses on while minimizing their estate and gift taxes.

Estate tax and gift tax exemptions may rise in 2018

Couples in North Carolina and throughout America may see their joint federal estate tax exemption climb above $11 million in 2018. It is also likely that the gift tax exemption will increase to $15,000 for 2018, which would mark the first increase since 2013. The federal estate tax exemption is indexed to inflation, and was first set at $5 million in 2011.

IRS offers extensions to declare portability

Portability is an estate tax provision that allows married couples to combine their estate tax exemption. That exemption is currently close to $11 million between both spouses, but many executors in North Carolina may not understand that it isn't given automatically. To take advantage of the portability provision, a surviving spouse must tell the IRS that it is being used before they pass away.

Estate tax planning when one spouse is not a citizen

Estate planning in order to avoid or reduce estate tax can be complicated, and it may become even more complicated if one spouse is not a citizen. The U.S. has a tax treaty with more than 70 countries, but not all of these treaties deal with estate tax. One of the first steps for determining estate tax when one spouse is a foreign national is to establish whether or not a person is considered a resident. This determination can be somewhat subjective although if people appear to have a residence in North Carolina with no intention of leaving they may be considered resident for estate tax purposes.

Tax court finds conflict of interest in estate tax appraisal

North Carolina executors of estates with significant assets may wish to be careful who they choose to perform estate tax appraisals. The Internal Revenue Service pays close attention to asset valuations, and the agency may issue a notice of deficiency when the appraised value of an asset differs significantly from its own valuation. The estate of a deceased New York art collector recently discovered this when a tax court ruled that two 17th Century paintings had been undervalued by $1.77 million.

Michael Jackson estate battles IRS over image rights

Music fans in North Carolina and around the country may be interested in learning about some recent developments concerning his legacy. The legendary performer's reputation had been badly damaged by child abuse allegations when he died, which prompted his estate to place a value of only $2,105 on his likeness and image rights. Jackson's music has remained extremely popular despite the controversy, and Forbes now lists the iconic entertainer as one of the highest-earning deceased celebrities.

Uncertain tax laws, trusts and estate planning

People in North Carolina who need to make estate plans might wonder whether they should wait until new tax laws are passed by the Trump administration. The best course of action is to avoid delaying the creation of an estate plan and make one that's based on existing laws. Tax changes may not even take effect for years or be reversed by a later administration. Furthermore, there are some benefits to creating an estate plan that are unrelated to taxes. For example, an ironclad trust shields an estate from creditors, divorce and other potential claims on its value.

Tax rules for foreign gifts and inheritances

Many North Carolina residents are globally mobile. As a result, some of them might have questions about how property received from outside of the United States may be taxed. Whether a gift or inheritance that is received from another country will be taxed seems to be a particular concern.