Читать книгу 2012 Estate Planning - Martin Inc. Shenkman - Страница 52

The repeal of the itemized deduction phase out and the personal exemption phase out will sunset (expire) in 2013. This might help taxpayers qualify to deduct more, but the restrictions may make that exercise academic by making it more difficult if not impossible to deduct certain expenses. You should still be cautioned that other restrictions such as the 7.5 percent (increasing to 10 percent) medical expense threshold, and 2 percent floor on miscellaneous itemized deductions, must still be contended with.

One proposal provides for the maximum tax benefit from itemized deductions and other tax benefits to be capped at 28 percent.

Possible deductions that are up for restriction might include the full laundry list of common tax deductions. Overall these changes may spur taxpayers to restructure transactions and the manner in which they handle their affairs. The family limited partnership (FLP) formed to take advantage of valuation discounts presently permitted under the gift and estate tax valuation rules may morph into a new purpose. If discounts are restricted or repealed (and for perhaps 99 percent of taxpayers it’s all academic if the $5 million inflation-adjusted exemption remains law) FLPs instead of being dissolved (which for asset protection reasons alone probably should not be) may be the only vehicle left to secure certain income tax deductions as itemized deductions are restricted.

Restricting deductions for charitable contributions has been talked about with increasing frequency. One proposal was to limit the charitable deduction for individuals to amounts over 2 percent of adjusted gross income (AGI). However, if medical deductions are restricted and miscellaneous itemized deductions eliminated, there may be less incentive to peg contributions to a percentage of AGI and instead just provide for a direct reduction of the amount that can be deducted. A restriction on the amount of a charitable contribution deduction, perhaps somewhat offset by increased tax rates, could have a combined impact of undermining any tax incentives for donations and of confounding potential donors as to the ground rules.

Deductions for certain medical expenses may be eliminated. Under current law, you can only deduct, as an itemized deduction, medical expenses to the extent that they exceed 7.5 percent of your AGI. This restriction is in addition to the others that limit the tax benefits of itemized deductions. Beginning in 2013, taxpayers will only be able to deduct medical expenses as an itemized deduction if they exceed 10 percent of AGI. Few individuals take advantage of this benefit, and of those that do most are generally old/sick. Congress provided that for those who are 65 and older the 7.5 percent rule will remain in place until the end of 2016.

State and local tax deduction for individuals has been talked about as a target. If this deduction is eliminated, the disparate impact on taxpayers could be significant.

All miscellaneous itemized deductions for individuals have been proposed for elimination. As discussed next, this might drive many taxpayers to establish entities for their business endeavors in an effort to retain some type of deduction offset for earnings.