Year-End Tax Planning: What Lawyers Are Saying

For your reference, here’s a look at what lawyers and law firms on JD Supra are writing about year-end tax planning [Updated 12/21]:

Donate to Charity for Tax Benefits (by Darrin Mish, Tampa Tax Attorney):

“Most of us know that donations in cash will make you eligible for
tax deductions. All charities will accept checks and most would also
accept gifts designated for specific activities you like. If you wish
to designate your gift toward a particular effort of your charity, just
make your wishes known to them.
You can also gain tax benefts is by giving gifts of property to your
charity. All you need to do is itemize the gifts you gave on your
income tax return and you can deduct the value of your gifts…” Read more>>

Time for Corporations to Get Ready to Issue Annual ISO/ESPP Information Statements and File New Information… (by Sheppard Mullin):

“In January 2011, Employers must furnish each employee who exercised
incentive stock options (“ISOs”) or sold or otherwise transferred
shares acquired under an employee stock purchase plan (“ESPP”) during
2010 with a detailed information statement by January 31, 2011, and
must also file an information return with the Internal Revenue Service
(the “IRS”) by February 28, 2011 (March 15, 2011 for corporations
filing electronically)…” Read more>>

Estate Planning Outlook: Are You Prepared for the Impending Tax Law Change? (by Partridge Snow & Hahn):

“As we write this, the federal estate and generation-skipping transfer
(“GST”) taxes are scheduled to be reinstated on January 1, 2011, with a
federal estate tax exemption of $1,000,000 and a maximum tax rate of
55%. The GST exemption will be $1,360,000. After years of benefit from
a rising exemption (from $1,000,000 in 2002 to $3,500,000 in 2009) and
a year of total repeal in 2010, we find ourselves once again facing
higher federal estate tax rates and a limited exemption…” Read more>>

Why Now is the Time to Give: 2010 Presents Unique Gifting Opportunities (by Jackson Walker):

“Because the current federal gift tax rate is historically low, and
because there is no generation-skipping transfer (“GST”) tax applicable
to generation-skipping transfers made this year, 2010 presents unique
gifting opportunities for individuals wishing to make taxable gifts to
children, grandchildren or other loved ones. However, time is of the essence…” Read more>>

Year End Opportunities for Wealth Transfer and Tax Savings to Consider (by Lane Powell PC):

“Many of the current income tax rates were enacted as part of
comprehensive tax legislation enacted in 2001. This legislation is
scheduled to expire at the end of 2010 and it is uncertain what path
the new Congress will take in January 2011. However, if Congress does
not act, individual income tax rates will rise in 2011, returning to
the rates applicable in 2001. As with the gift planning opportunities
identified in the next section below, the strong potential for an
increase in individual income tax rates in 2011 creates incentives for
2010 year-end tax planning strategies…” Read more>>

2010 Year-End Estate Planning Advisory (by Katten Muchin):

“If you wish to make gifts this year to take advantage of the 35% gift tax rate but would like to hedge against a possible retroactive reinstatement of the GST tax and a higher federal gift tax rate, you should consider making a gift to a “disclaimer trust” for your spouse. Before the end of this year you would create a lifetime trust for your spouse. The gift would not be subject to gift tax as long as your spouse is a U.S. citizen and the trust is created to qualify as what is known as a QTIP trust, which requires your spouse to receive all of the trust income currently…” Read more>>

Federal Law Excludes 100% of Gains on Qualified Small Business Stock Acquired By December 31, 2010 (by Fox Rothschild):

“On September 27, 2010, President Obama signed the Small Business Jobs
Act of 2010 aimed at encouraging investment in small businesses. One of
the Act’s most important provisions is the amendment of Internal
Revenue Code Section 1202 that permits the temporary exclusion of 100
percent of the gains on the sale or exchange of qualified small
business stock. However, taxpayers must act within limited time periods
to take advantage of this provision as the 100 percent exclusion only
applies to qualified small business stock acquired between September
27, 2010, and December 31, 2010…” Read more>>

Year-End Executive Compensation Matters and Issues Going Forward (by Manatt Phelps):

“As we approach the end of the year, companies need to be mindful that
their ability to correct documentary failures of Section 409A with
little or no adverse tax consequences is rapidly closing and that new
executive compensation reporting requirements will be required in the
upcoming year, pursuant to the Dodd-Frank Act…” Read more>>

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