Simplified tax regime under Trump might obviate current workarounds, experts say

Greenberg Glusker LLP

Greenberg Glusker Fields Claman & Machtinger LLP

Marc M. Stern, an estate planning partner at Greenberg Glusker, was quoted in a Daily Journal article published on January 11, 2017, about the potential for a system under Trump in which exotic accounting methods to reduce tax burdens will not be needed. He said the regulations to eliminate discount valuation may not even matter anymore.

"After the election we and a lot of connected practitioners around the country put a hold on everything," Stern said. "Why race to address a problem that may not be a problem in six months? Why rush to get things out of the estate if there's going to be no estate tax?"

 Nonprofit organizations might see their end-of-the-year influx of donations dry up in years to come if Trump makes good on his proposal to cap itemized deductions for individuals at $200,000. Current rules allow deductions of up to 50 percent of adjusted gross income with the ability to carry over the unused portion of that deduction for five years.

Stern said the charities likely had a massive influx of donations in December to take advantage of that five-year carryover credit.

"One thing a lot of people were doing was accelerating those charitable gifts in 2016 to get more bang for their buck in terms of tax deductible limits, since next year may not be as generous," Stern said.

Stern along with other attorneys quoted said they are all careful to note that until the final proposals are unveiled, even the most experienced guesses are still just that.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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