TaxEsqBlog -by Ronald J. Cappuccio, J.D., LL.M.(Tax)

Trump administration considers taking inflation into account when taxing capital gains As reported by Reuters: The Trump administration is considering bypassing Congress to grant a $100 billion tax cut (as projected over a decade) to taxpayers by taking inflation into account when determining capital gains tax liabilities, the New York Times reported on Monday, July 30. The 20% capital gains tax rate is currently applied to the difference between an asset's value when it is purchased and when it is sold. But the calculation does not take the effects of inflation into account, which can raise the size of the tax bill significantly depending on the inflation rate. Quoting from an interview with Treasury Secretary Steven Mnuchin, the newspaper said the Administration could change the definition of "cost" used to calculate capital gains, allowing taxpayers to adjust the value of an asset for inflation when it is sold. "If it can't get done through a legislati...

Here is a detailed Explanation of the Estate and Gift Tax Changes: 2010 Estate Tax *Basic exclusion amount: $5,000,000 Formerly called applicable exclusion amount Unified credit: $1,730,800 *Maximum tax rate: 35% Level where 35% rate begins: $500,000 But no tax until taxable estate + gifts > $5m * Step-up in basis: Full step-up, unless estate elects out of estate tax State death tax deduction: Still available on Line 3b (as it was in 2005-2009) *Due date: No earlier than nine (9) months after date of enactment *Carryover basis: Applicable only if estate elects out of estate tax *Max basis increase available: $1.3m (plus $3m for property passing to spouse) *Due date of new form (8939): No earlier than nine (9) months after date of enactment Penalty for failure to report to the IRS: $10,000 per failure ...

Lottery Winners Lose! The 11th U.S. Circuit Court of Appeals in Atlanta ruled Dec. 19 that Bertucci and the others around the country who sold their winnings to investment companies must pay income taxes on the lump sum they received instead of lower capital gains taxes. Click Here for more details.