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Gonser gerber webinar final

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  • 1. 2013 IndividualTax Laws andPhilanthropy: WhatYourDevelopment Office Needs to KnowWednesday, May 29, 201311:00 am to 12:30 pm1
  • 2. Our Faculty Members2
  • 3. 3King Coplers practice focuses on tax planning for businessesand individuals, as well as planning for mergers andacquisitions. Before joining the firm, King was the partner incharge of the Chattanooga tax practice of Ernst &Young.Licensed to practice inTennesseeEstate PlanningCounsel of Chattanooga, past PresidentAmerican Institute of Certified Public Accountants (retired)Tennessee Society of Certified Public Accounts (retired)King received his BS, magna cum laude, from MiddleTennesseeState University, and his law degree from University ofTennessee College of Law.King Copler
  • 4. 4Dana Perry focuses her practice on estate planning,elder law and special needs trust planning.Certified as an Elder Law Specialist (CELA) by theTennesseeCommission on Continuing Legal Education and SpecializationLicensed to practice inTennessee and GeorgiaAccredited Attorney, Department ofVeterans AffairsListed in The Best Lawyers in America for elder law and trustsand estatesMartindale-HubbellAV® Peer Review RatedDana received her BA from the University of the South(Sewanee), and her law degree fromVanderbiltUniversity.Dana Perry
  • 5. For Our Question and Answer SessionsType your questions into the “Questions” panelon the webinar tool.Once the Webinar is Over• You will receive a copy of this presentation• You will receive a recording of this webinar• Any questions that are not answered during the webinarwill be addressed in a follow-up email
  • 6. Agenda• Part 1: IncomeTax and HealthcareTax• Part 2: Changes to IncomeTax Deductions• Part 3: Proposals to Limit Itemized Deductions• Part 4: Tax Increases on Estates andTrusts• Question and Answer• Part 5: Charitable Giving From IRAs• Part 6: Changes to Estate, Gift and GSTTaxes• Part 7: FinalThoughts• Final Q & A• Wrap-Up6
  • 7. Quick Poll #17
  • 8. What percentage of your totalfundraising is from your annualgiving program?8• 0% - 25%• 26% - 50%• 51% - 75%• 76% - 100%
  • 9. IncomeTax andHealthcareTaxW. King Copler9
  • 10. Changes to theIncomeTax RatesIndividual RatesTop rate goes to 39.6% for single taxpayersover $400,000 and $450,000 for marriedcouples.10
  • 11. Changes to theIncomeTax RatesCapital Gains RateMaximum capital gains rate goes to 20%from 15% in 2012.11
  • 12. Changes to theIncomeTax RatesHealthcareTax3.8% tax added for those with modifiedadjusted gross income over $200,000($250,000 for joint returns). Applies toinvestment income.12
  • 13. Alternative MinimumTax(AMT) Relief13• Permanent Relief from the individual(AMT). Exemption amounts increasedto $50,600 for unmarried filers and$78,750 for married filers.• Amounts will be adjusted for inflation.
  • 14. Changes to IncomeTaxDeductionsW. King Copler14
  • 15. Phase-out• Personal Exemption and ItemizedDeduction Phase-out. Deductions phase-out 3% for incomes over $250,000 forsingles. ($300,000 for married couples.)15
  • 16. SalesTax• Extension of state and local general salestax deductions.16
  • 17. Proposals to Limit ItemizedDeductionsW. King Copler17
  • 18. Proposals• PresidentObama has called for a cap ofbenefit of itemized deductions to 28%.• Simpson-Bowles -- one option wouldeliminate all itemized deductions and lowerrates.18
  • 19. Proposals, continued• FiscalCommission proposal wouldeliminate all itemized deductions.• Paul Ryan’s proposal eliminates mostitemized deductions.19
  • 20. More Proposals toLimit Deductions• Wyden-Coats would eliminate mostitemized deductions but would retainmortgage interest and charitablecontribution deductions.• Expect States to follow suit.20
  • 21. Tax Increases on Estates andTrustsW. King Copler21
  • 22. Top Rates• Top rate of 20% on capital gains and39.6% on ordinary income.• Applies to estates and trusts withincome over $11,950.22
  • 23. HealthcareTax• 3.8% Healthcare tax applies toestates and trusts with incomeover $11,950.23
  • 24. Questions and AnswersType your questions into the “Questions” panel on the webinartool. Questions will be answered during Q & A, during thepresentations, or through the Questions panel.Questions that are not answered during the webinar will beaddressed in a follow-up email.24
  • 25. Quick Poll #225
  • 26. What average percentage of yourfundraising dollars are frombequests?• 0% - 25%• 26% - 50%• 51% - 75%• 76% - 100%26
  • 27. Charitable Giving From IRAsDana Perry27
  • 28. Direct Contributions from IRAsExtendedThrough 2013• Must be 70½• Limited to $100,000• Must be a direct cash transfer from IRAto charity.• Amount not included in donor’sincome.• No charitable deduction.28
  • 29. Charitable Gifts at Death• No step up on retirement assets.• Top income tax rate 39.6% for singletaxpayers over $400,000 and $450,000for married couples on withdrawal.• Charity receives 100% by contrast.29
  • 30. Changes to Estate, Gift andGSTTaxDana Perry30
  • 31. Unified Credit• Permanent extension of $5 millionunified credit “base” amount.• Indexed for inflation; $5,250,000 for2013.31
  • 32. Unified Credit• Usable on lifetime gifts and/or transfers atdeath.• Exemption was previously capped at $1million for transfers made during life—bigchange.• Carryover basis for gifts made during life,though.32
  • 33. Annual Exclusion• $14,000 per donee in 2013• $28,000 if a spouse joins in the transfer• Indexed for inflation• No limit on the number of donees that adonor may benefit.• Must be a "present interest gift.“• Carryover basis on gifted assets33
  • 34. Tuition and Medical Exclusion• Must be paid directly to an educationalorganization or organization providingmedical care.• Tuition exclusion equals tuition only; doesnot include books, supplies, dormitory feesand rent.• Medical expenses include general medicalexpenses and medical insurance.34
  • 35. Estate and GiftTax Rates• Estates – flat tax of 40% taxable estatein excess of $5.25 million.• Gifts – flat tax of 40% for aggregategifts in excess of $5.25 million.35
  • 36. Estate and GiftTax Portability• To extent one spouses unified estateand gift tax exemption is not fullyused upon his death, it carries over andmay be used by his spouse upon herlater death to shelter assets fromestate tax.• Cannot accumulate unified creditamounts from multiple deceasedspouses.36
  • 37. GSTTax Rules• Each person has a lifetime/death GSTexemption equal to $5.25 million(2013).• Flat tax of 40% on GST transfers inexcess of $5.25 million.• No portability—critical consideration• GST tax is imposed on top ofestate/gift tax.37
  • 38. Charitable Deduction• No change – all property transferred toa qualifying charitable institution willbe exempt from gift and estate tax.38
  • 39. Quick Poll #339
  • 40. Has your institution had any estatesthat have matured as a bequest inthe last 6 months?• Yes• No40
  • 41. FinalThoughtsDana Perry41
  • 42. A Changed Landscapefor Planning• Only 1.4 of every 1000 estates will oweany estate tax, or in reverse, 998.6estates of 1000 will owe no estate tax.• Doesn’t take into effect the “estatetax” (income tax) from retirementaccounts, however.42
  • 43. A Changed Landscapefor Planning• Only 3,780 estates expected toowe estate tax in 2013.• Anticipated “effective” tax rate of16.6%.43
  • 44. Demographics of Wealth• Only 3.1 million US millionaires in 2010 withover $1 million in investable assets.• 63% male, 37% female• Only 40,000 Americans had a net worth of$30 million or up in 2010.• Only 13% of US households have a networth of $500,000 or more.• Globalrichlist.com44
  • 45. PlanningTrends• More emphasis on income tax planningand lifetime gifts to charity than estatetax planning and gifts at death due todemographics?• Retirement plan gifts at death to charitystill a powerful planning option.• Fewer lifetime gifts to heirs due tocarryover basis, higher unified credit andportability?• Planning for GBLT couples45
  • 46. Questions and AnswersType your questions and activity responses into the“Questions” panel on the webinar tool.Questions will beanswered during Q & A, during the presentations, or throughthe Questions panel.Questions that are not answered during the webinar will beaddressed in a follow-up email.46
  • 47. ThankYou for Attending!Please complete the survey that will arrive via emailto help us address topics that are of interest to you!Contact us directly with additional questions:Dana B. PerryChambliss, Bahner & Stophel, P.C.Dperry@cbslawfirm.com423.757.0228Jennifer SpuehlerGonser Gerber Institutejspuehler@gonsergerber.com630.505.8714View additional upcoming webinars and workshops at ourwebsite www.gonsergerber.com47W. King CoplerChambliss, Bahner & Stophel, P.C.KCopler@cbslawfirm.com423.757.0269

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