Here are the slides from a presentation I jointly presented with Jeff Call and GLenn Rodney in Orlando this January

1. How to Benefit from Net Operating Losses, Roth IRA conversions and Estate Planning in 2011 January 15, 2011 Presented by: Glenn Rodney Jeff Call Trey Webb

9. What is a net operating loss? PAGE Example – Joe Homebuilder has a tax loss of $2,000: Wages $10,000 Partnership loss $7,000 Mortgage interest of $5,000 What is his net operating loss? Net Operating Losses

27. Estate Tax Planning in 2010/2011/2012 and ROTH IRA Conversions Presented by: Jeff Call Glenn Rodney Trey Webb

28. Estate tax planning for 2010 2010 - Estate Tax 2010 - Gift Tax 2010 - Generation Skipping Tax Exclusion amount $5,000,000 Maximum tax rate 35% Carryover basis Option to elect modified carryover basis regime and no estate tax instead of estate tax with $5 mm exemption Exclusion amount $1,000,000 (no change) Maximum tax rate 35% (no change) Exclusion amount Tax repealed Maximum tax rate 0%

29. Estate tax planning for 2010 2010 Estate tax details * Basic exclusion amount $5,000,000 (formerly called "applicable exclusion amount") *Maximum tax rate 35% *Step-up in basis Full step-up, unless estate elects out of estate tax State death tax deduction Still available on line 3b (as it was in 2005-2009) *Due date No earlier than nine months after date of enactment *Carryover basis Applicable only if estate elects out of estate tax *Max basis increase available $1.3M (plus $3M for property passing to spouse) *Due date of new form (8939) No earlier than nine months after date of enactment Penalties: 1) Failure to report to the IRS: $10,000 per failure 2) Intentional disregard: 5% of FMV of property 3) Failure to report to beneficiaries:/donees: $50 per failure Capital gains rate Proceeds in excess of adjusted tax basis subject to tax at the applicable capital gains rate when sold (currently 15%)

30. Estate tax planning for 2011-2012 2011/2012 - Estate Tax 2011-2012 - Gift Tax 2011-2012 - Generation Skipping Tax Exclusion amount $5,000,000 Maximum tax rate 35% Exclusion amount $5,000,000 Maximum tax rate 35% (no change) Exclusion amount $5,000,000 Maximum tax rate 35%

31. Estate/Gift tax planning for 2011-2012 2011-2012 Estate/Gift tax details *DSUEA "Deceased spousal unused exclusion amount" (new in 2011) Basic estate/gift exclusion amount $5,000,000 [2012: indexed for post-2010 inflation] now reunified *Maximum tax rate 35% State death tax deduction Still available on line 3b (as it was in 2005-2009) Portability of exclusion DSUEA only from estate of spouse who dies in 2011 or 2012 Last deceased spouse DSUEA available only from last deceased spouse. Thus, DSUEA could be lost if surviving spouse remarries, and is then "rewidowed.“ Unless it is used for gifting during lifetime then you could benefit from the use of DSUEA’s from multiple deceased spouses during the donor’s lifetime. * Applicable exclusion amount Basic Exclusion Amount + DSUEA Step-up in basis Assets in first estate placed in bypass trust get no additional basis step-up at survivor’s (2 nd ) death, but are protected from tax on any appreciation at 2nd death. Same assets instead given directly to surviving spouse (and protected from tax in 2nd estate by DSUEA) do get step-up. But trade-off is that appreciation of these assets between 1st and 2nd deaths could be taxable if they exceed combined exclusions.

39. Assumptions Taxpayer Age 40 60 FMV Traditional IRA $500,000 $500,000 Basis Traditional IRA - - FMV Roth IRA - - Traditional and Roth IRA Growth Rates 7% 7% FMV Taxable Account $450,000 $450,000 Basis Taxable Account $400,000 $400,000 Taxable Account Yield 3% 3% Taxable Account Growth Rate 4% 4% Annual Asset Turnover 20% 20% Distribute Yield No No Tax Rate at conversion 35% 35% Increased Tax Rate (5 years after conversion) 40% 40% Decreased Tax Rate (5 years after conversion) 30% 30% Capital Gains Tax Rate 20% 20% Estate Tax Rate 35% 35% Estate Tax Exemption $5,000,000 $5,000,000 Roth IRA Conversion Amount $500,000 $500,000 Premature Distribution Penalty 10% 10% Taxpayer has other income to cover living expenses

40. Age 40 – Tax Rates Remain Constant Net to Heirs

41. Age 40 – Tax Rates Decreasing Net to Heirs

42. Age 40 – Tax Rates Increasing Net to Heirs

43. Age 60 – Tax Rates Remain Constant Net to Heirs

44. Age 60 – Tax Rates Decreasing Net to Heirs

45. Age 60 – Tax Rates Increasing Net to Heirs

47. Roth IRA Conversion Timeline Conversion Period Recharacterization Period 1/1/2010 First day conversion can take place 2010 12/31/2010 Last day conversion can take place 4/15/2011 Normal filing date for 2010 tax return 10/15/2011 Latest filing date for 2010 tax return/last day to recharacterize 2010 Roth IRA conversion 12/31/2011 2011