Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Tax cut’

The Macroeconomic Effects of the Bush Tax Cuts

Posted by William Byrnes on January 3, 2011


Why is this Topic Important to Wealth Managers? Discusses and examines some long-term implications on the economy, through a macroeconomic perspective, of the Bush Tax Cuts.  Examines financial data spanning over a decade to help wealth managers converse on current economic topics.

A recent report examined certain major economic indicators in relation to the Bush tax cuts.  These indicators, in total, showed a negative overall effect that the Bush tax cuts had on the economy.  The below chart presents common economic gauges before and after the tax cuts (which first occurred in 2001 and 2002).

To read this article excerpted above, please access www.AdvisorFYI.com

Posted in Tax Policy, Uncategorized | Tagged: , , , | Leave a Comment »

Dissecting the Obama Tax Cuts: Qualified Dividends and Capital Gains

Posted by William Byrnes on December 21, 2010


Why is this Topic Important to Wealth Managers? Yesterday we presented an overview of the Obama Tax Cut provisions that are relevant to wealth managers.  Today we begin by taking a closer look at some of the details of those provisions and how they relate to wealth managers and their clients.

Section 102 of The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR. 4853)provides for an extension of the regular and minimum tax rates for qualified dividend income and capital gains as were in effect before 2011.  The extension will continue for an additional two years.

To understand the impact of this provision of the new bill, it will serve the reader to understand what the regular and minimum tax rates in relation to qualified dividend income as well as capital gains means.  Read this complete article at AdvisorFYI

Posted in Taxation | Tagged: , , , , , , , | Leave a Comment »

Obama Compromises and Extends All Bush Tax Cuts (and then some…)

Posted by William Byrnes on December 20, 2010


President George W. Bush and President-elect B...

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On Friday, President Obama signed into legislation, what is quickly becoming known as the Obama Tax Cuts, which extend tax breaks initially created by the George Bush Administration about a decade ago.  For the previous discussions and various versions of this “long and winding road” of the passage of this new tax law – see Tax Deal Reached

The new tax law “The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR. 4853)” provides an extension for two years (unless otherwise noted), of generally the following (not all inclusive):

The full free article and links to all the relevant legislation and Congressional explanations of the legislation may be read at http://www.advisorFYI.com

 

 

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Life Insurance and the Generation—Skipping Transfer Tax

Posted by William Byrnes on November 15, 2010


Why is this Topic Important to Wealth Managers?  Provides details about one concept that wealth managers often overlook, the generation skipping transfer tax.  Also presents general concept themes and examples to show effective uses of life insurance and trust in consideration of the tax. 

In general, the generation-skipping transfer tax is levied on the value of life insurance that is transferred during the grantors lifetime or at death, to a skip person. [1]  The GST is levied in addition to estate and gift taxes. [2]

The generation-skipping transfer (GST) tax “scheduled to resume in 2011 at a rate of 55%, with a $1 million exemption. The rate was 45% in 2009, with a $3.5 million exemption.” [3]  For more information about the expiring tax cuts and new tax rates, see our blogticle: AdvisorFYI: Estate and Gift Taxes, Tax Cuts and More

“Certain direct gifts that qualify for the gift tax exclusion may also qualify for an annual exclusion that can be applied against the GST tax.” [4]  Many wealth managers encourage clients to take full advantage of the annual exclusion to avoid GST tax considerations at some later point.  However, “the expiration of the GST tax has complicated matters for wealthy individuals hoping to make 2010 gifts in trust that skip generations.” [5]  The use of trusts in consideration of the GST tax is discussed below.  For examples of insurance uses with trusts generally, see our previous blogticle: Trusts that Purchase Life Insurance; Known Formally as the “Irrevocable Life Insurance Trust

Please link to AdvisorFYI for the entire blogticle.

Posted in Estate Tax | Tagged: , , , , , , , | Leave a Comment »

 
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