Client Alert: The Empire has fallen; Excelsior reigns

Financial Services Alert: The Impact of the Dodd-Frank Wall Street Reform

Bridging the Financing Gap with Seller Financing

Firm Suggests Changes to Proposal to Require Reporting of Uncertain Tax Positions

Anchin Capital Advisors Webinar: Company Sell-Side Strategies for the Apparel and Textile Industry

IRS to Audit Thousands of Deferred Compensation Plans

MTA Chiefs Address MWBE Honorees at Anchin Event

Anchin named third Best Company to Work For in New York State

Recent Decision Reinforces Need for Robust Discovery Process

How health care reform will affect your tax bill

Client Alert: Will the HIRE Act benefit your business?

Client Alert: Court opens refund opportunity on FICA withheld on severance pay

Client Alert: Offshore Hedge Funds are Not Foreign Financial Accounts

Client Alert: NY Legislation Would Presume Construction Workers are Employees

Don't Lose out on Rental Real Estate Losses

Client Alert: IRS to require disclosure of uncertain tax positions

Anchin earns "Best Of" honors

Anchin launches Anchin, Block & Anchin (Cayman) Ltd.

Final Cutoff Date for Empire Zone Sales Tax Exemption

Anchin Wealth Management Webinar - When Confusion Reigns: Wealth Management and Estate Planning in Uncertain Times

Anchin Webinar: Staying Ahead of the Curve: Successful Administration of Employee Benefit Plans

COBRA premium assistance extended

New Opportunities in Roth IRAs

2009 Security Primer

Questions asked during Estate Planning Webinar

Anchin Webinar: The Perfect Storm for Estate Planning

Financial Services Alert: FASB Addresses Fair Value of Alternative Investments

Anchin’s Year-End Tax Planning Webinar

2009-2010 Tax Planning Guide

Weathering the Storm:
Year-end Tax Planning in Tough Times

Participants in Anchin’s recent webinar, “Year-End Tax Planning in Tough Times,” learned about year-end tax planning techniques designed to help protect wealth in a challenging economy.  Anchin partners Clarence Kehoe, Peter Baum, and Paul Gevertzman discussed their insights and approaches on how best to minimize tax liability through effective tax planning.  Here are the answers to questions asked during the webinar:

1.  All of my income is long term gains and capital dividends.  Why was I in the Alternative Minimum Tax last year?

Peter Baum: In general, whenever the tax rate difference is small between the regular and Alternative Minimum Tax, you have a greater chance of being subject to the AMT, as there is not enough ordinary income to use the tax deductions.  In the case of this question, there is no spread in tax rates for either computation, regular or AMT, and the rate is 15% if all of your income is long term capital gains and capital gain dividends.
Here’s an example:  Let’s assume your total income was $100k and it was all long term capital gains and capital gain dividends, and your itemized deductions are $50k, which is mostly comprised of state and local taxes.

Under a regular tax computation, you would have taxable income of $50K (your $100K income less your $50K itemized deductions) subject to the capital gain rate of 15%. In this case, your regular tax would be $7,500 ($50,000 taxable income multiplied by the 15% rate).  Alternatively, under the AMT computation, all of your state and local taxes would not be deductable for AMT purposes. Therefore, you would lose the ability to deduct your state and local taxes and all of your long term capital gains income would be taxed at the capital gain rate of 15%, resulting in a tax of $15,000 ($100,000 taxable income multiplied by 15% rate).  As the AMT liablitity is greater than the regular liability, this taxpayer would be subject to the AMT.

As you can see from this example, it is important to work with your tax advisor to understand your exposure to the AMT and plan properly.

2. I’m considering converting a sizable amount of my IRA to a ROTH IRA.  How do I know if this is the right thing to do?

Clarence Kehoe:  We spoke about general rules of thumb – when it makes sense to consider a ROTH conversion. Anchin has software that does sophisticated income and estate tax projections under various scenarios that will allow a taxpayer to make a more accurate, numeric analysis of the consequences of a conversion. Contact a member of our Tax Department if you are interested in such an analysis.

3. I’m considering selling my primary residence. Can I exclude a portion of the gains if I roll over the proceeds into another residence?

Paul Gevertzman:  I get asked this question all the time. Unfortunately, the answer is no! You can no longer roll over the gain. There are a lot of homeowners out there with prior rollovers; but when they enacted the law allowing for the $500,000 gain exclusion, the rollover went out the window. If you previously rolled over a gain into your current residence, the tax cost on your residence is still lowered by that prior rollover. But if you sell the residence now, you get the $500,000 exclusion. However, you can no longer roll the whole thing forward. That’s a very common misconception.

December 2nd Webinar: “The Perfect Storm for Estate Planning”

Anchin will host its next webinar, “The Perfect Storm for Estate Planning,” on Wednesday, December 2nd at 10:30 am.  Anchin partners E. Richard Baum and Bernard Rappaport will cover critical aspects of effective estate planning with a focus on the current economic environment and recent changes in relevant legislation.  Join them as they discuss valuations, trusts, entity freezes, gifts, life insurance, and other estate planning techniques that can help protect your wealth and assets for future generations.

Click HERE to register for “The Perfect Storm for Estate Planning.”

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U.S. Treasury Circular 230 Disclosure: If any tax advice is contained in this communication or attachments, it is not intended or written to be used, and cannot be used, for the purpose of avoiding tax related penalties under federal, state, or local law.
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