October 24, 2012

Janis Cowhey, Tax & Business Services Partner, Quoted in Associated Press Article "Coming Changes in Estate, Gift Taxes Stir ‘Frenzy’"

Associated Press

By Dave Carpenter

Featured Janis Cowhey, Partner, Tax & Business

Related Services Modern Family & LGBT Services, Tax & Business

Janis Cowhey, Tax & Business Services Partner, Quoted in Associated Press Article "Coming Changes in Estate, Gift Taxes Stir ‘Frenzy’" Modern Family & LGBT Services

Excerpt:

Taxes that are largely a concern of the very rich will soon affect far more people unless Congress steps in.

The impending drastic changes in the estate and gift tax laws are prompting a flurry of activity as 2013 draws near. Family members are making financial gifts, creating trusts and considering other tax-minded moves.

Financial advisers, and trust and estate attorneys have been flooded with requests for assistance in the final months before the record-high exemption for both taxes is scheduled to plunge to $1 million from $5.12 million on Jan 1.

If unaltered, the value of any estate in excess of $1 million will be subject to the estate tax, at a top rate of 55 percent next year, before passing to family or other heirs. Currently the top rate is 35 percent, starting at a level more than five times higher.

“There’s been a little bit of a frenzy all of a sudden,” says Janis Cowhey, a principal with New York accounting firm Marcum LLP. “People are saying ‘Wait a minute, this is really going away. I need to do something before the end of the year.'”

GIVE AWAY CASH.

For the time being, taxpayers can gift as much as $5.12 million during their lifetimes without paying taxes. That total is above and beyond the $13,000 annual gift-tax exemption that many taxpayers are aware of. That exclusion allows you to make an unlimited number of gifts of up to $13,000 each year without incurring any taxes.

But gifts much larger than that will be needed between now and year-end to make a difference in estate and tax planning.

At the extreme wealthy end, McDonagh says one couple she’s advising wrote separate checks for $5 million to their adult children recently. It’s money the children would have inherited anyway, and now will be tax-free.

GIVE AWAY A HOME.

A real estate investor in her 50s, another of Cowhey’s clients, gave her Manhattan apartment outright to her daughter and now rents it back. A good pension, solid income and relatively low valuation of $400,000 gave her client the confidence to make the move in order to save on future estate and gift taxes, McDonagh says.

Click here to read the full article on www.huffingtonpost.com >>

Featured

Janis L. Cowhey

Janis L. Cowhey

Partner

  • Tax & Business
  • New York, NY