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Strategies |
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Remember the Alternative Minimum, Gift and Estate Taxes
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Beware of the Alternative Minimum Tax (AMT)
The AMT was originally created in the late 1960's to prevent very wealthy people from living tax-free.
Because it was never indexed for inflation, many middle-income taxpayers are finding that they also owe the AMT — particularly
if one or more of the following apply:
- Income over $75,000 and some large itemized deductions
- Several children
- Interest deductions from second mortgages
- Interest from specified tax-exempt private activity bonds
- High state and local taxes
- Realized gains on incentive stock options
Investors already affected by the AMT, or those who are close to it,
should consider speaking with a tax advisor or other professional to find out what steps they can take for
better AMT planning.
Impact of Estate and Gift Taxes
The federal estate tax has been repealed for one year starting January 1, 2010 and is scheduled to return in 2011. In 2011, the first $1 million of an estate is exempt from federal estate taxes, anything over will be taxed at 55%. The gift tax applies to the transfer by gift of any property (including cash). There is an annual exclusion of $13,000.
Next: Consider Charitable Contributions
This information is general
in nature and is not intended to constitute tax advice. Please consult
your tax advisor for more detailed information on tax issues and
for advice on your specific situation.
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