Handling income and expenses of the decedent's last year

Article Abstract:

Tax planning for a decedent's final income tax return should be completed before the death to maximize tax benefits while minimizing the loss of tax deductions. Income in respect of a decedent that is excluded from gross income because it accrued after the date of death such as deferred compensation should be given to a beneficiary in a low tax bracket while some gifts do not require inclusion in gross income and so minimize taxes. Also, if the decedent is married, tax benefits can be used by filing a joint return for that year allowing compensation for net operating losses.

Tax planning, Income tax

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New developments create opportunities via gifts of stock options

Article Abstract:

The SEC released rule 16(b) changes which, along with IRS letter rulings, allow executive stock options to be transferred with no or little gift tax to their children either outright or through the medium of trusts. This changes prior law where such options were not transferable. The new rule does not generate complicated planning issues such as when gifts are complete, gift valuation, includability in the estate, and does IRC section 83 income recognition. Transferring stock options to a grantor trust is a suggested method of planning.

United States, Compensation and benefits, Stock options, Executives, Executive compensation, Trusts and trustees, Trustees, Trusts (Law), Gift tax

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