In this election year, one of the most important decisions will be made on your 2015 tax return. You must determine whether it is better to deduct state and local income taxes paid last year or to claim a deduction for state and local sales taxes. What’s at stake? Tax dollars.
Facebook founder Mark Zuckerberg made news recently by promising to give away 99% of his net worth, including his Facebook shares, to charity. The arrangement takes advantage of a unique tax break for charitable gifts of appreciated property, such as stock.
Background: If you have held property long enough for it to qualify for a long-term capital gain if you had sold it—in other words, more than one year—you can deduct an amount equal to the property’s fair market value (FMV). On the other hand, if the property would not qualify for long-term capital gain treatment on a sale, your deduction is limited to your basis in the property, which is often its original cost.
Despite its off-putting name, a “Crummey trust” can provide favorable results for individuals who have a significant amount of assets. This device might be incorporated into a comprehensive estate plan.
Are you planning a business trip to a distant city? If the destination is known for its cultural attractions or recreational activities, you might want to combine your business with a little pleasure. In fact, this could be a chance to get away after the children have gone back to school or to just spend some quality “alone time” with your spouse.
The good news is that the bulk of your expenses are deductible if you handle things the right way. However, if you are not careful, you could run afoul of some tricky tax rules.