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Preserve Family Wealth with Portability

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Extension of Time to Elect Portability of the DSUE

and Preserve Family Wealth

In 2011, the IRS introduced the concept of portability of the estate tax exemption from a deceased spouse to a surviving spouse. Currently, with the federal estate tax exemption at $12 million, a married couple can transfer up to $24 million to heirs without a federal estate tax. One of the tools enabling this large tax-free transfer is electing the DSUE, the “Deceased Spouse Unused Exclusion.”

What is Portability and How to Obtain it?

Portability occurs when a surviving spouse files a US Form 706, Gross Estate Tax Return, for the sole purpose of calculating and capturing any unused estate tax exemption from the estate of the first spouse. Completing a Form 706 to make the DSUE election is no easy task.

Why should one elect Portability/DSUE?

If the surviving spouse has an estate worth much lower than the current $12 million estate exemption, why file for the DSUE?

  1. Congress may reduce the estate tax exemption to 5 or 3.5 million
  2. The estate of the surviving spouse may appreciate substantially if there are businesses and/or real estate
  3. A young healthy spouse has many years to accumulate more wealth and have a potential taxable estate
  4. The surviving spouse may inherit from other relatives

When must one file to elect Portability/DSUE?

Good news! This year the IRS extended the time to file for the DSUE election to on or before the fifth anniversary of the decedent’s death.

Conclusion

With the current federal tax exemption so high, spouses should take advantage and claim any unused estate tax exemption after the death of the first spouse. Given the factors mentioned above, even smaller estates should consider filing for portability.

File now for your NJ ANCHOR Property Tax Rebate

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Be Thankful for the NJ ANCHOR Property Tax Rebate

New Jersey recently launched the ANCHOR program to help homeowners and renters save on property taxes. It is an expansion of the Homestead Benefit Program. ANCHOR stands for Affordable NJ Communities for Homeowners and Renters. The current year ANCHOR program covers 2019.

Who is eligible for the 2019 Anchor program?

  • Homeowners with income of $150,000 or less will receive $1,500
  • Homeowners with income over $150,000 and up to $250,000 will receive $1,000
  • Renters with income of $150,000 or less will receive $450

You are considered a homeowner if you owned a house or condominium on Oct. 1, 2019 and paid property taxes. You are a renter if on Oct. 1, 2019 you rented an apartment, condominium or house.
How do I apply?
Homeowners need an ANCHOR ID and PIN to apply online on the NJ Division of Taxation website or by phone at 877-658-2972. Informational mailers with the ID and PIN numbers were sent the first week of Oct. 2022. If you didn’t receive the form, call the ANCHOR hotline at 888-238-1233. If you applied for the Homestead Rebate last year, you can get your ID and PIN online at ANCHOR ID and PIN .
Tenants can and should apply online at Tenant Online Filing. Tenants do not have an ID and PIN.
Owned a home in 2019 but recently moved?
If you did not receive a mailer, access the online ID and PIN Inquiry System   to retrieve your ID and PIN. Or call the ANCHOR hotline.

Paper applications
Some homeowners must file paper ANCHOR applications. They include:

  • You shared ownership of your home with someone who was not your spouse
  • You are a widow(er) and the deed lists both your name and the name of the deceased spouse
  • You are the executor filing on behalf of a deceased homeowner
  • You are filing for property held in trust
  • You are divorced- you should report your percentage of ownership

When will I receive the ANCHOR payment?
Payments will be sent out in late Spring 2023. ANCHOR payments will be paid in the form of a direct deposit or check, not as a credit to your property tax bill.
When is the ANCHOR application deadline?
The initial deadline was December 30, 2022. The new extended deadline is Feb. 28, 2023!
Eligible homeowners and tenants should file as soon as possible to anchor in their 2019 rebate. You’ll be happy when the rebate floats into your bank account in the Spring of 2023.

 

 

Seminar Invite: How to Preserve Assets in Nursing Home Situation or Long Term Care Situation

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Urbach Avraham, CPAs

INVITES YOU TO A
Complimentary Seminar on “How to Preserve Assets
When Faced with a Nursing Home or Other Long-Term Care Situation”

 

Tuesday, July 9, 2019 from 8:00 a.m. to 9:45 a.m.
At 1581 Route 27, Suite 201, Edison, NJ 08817

As a service to our clients, we are pleased to host guest speaker,

Michael K. Feinberg, Esq. of Greenbaum, Rowe, Smith & Davis

Michael will discuss:

• How to preserve assets
• Can we keep our house? Our IRA accounts?
• Debunking the many myths about Medicaid

Michael Feinberg is a partner at Greenbaum, Rowe, Smith & Davis, LLP in Woodbridge, NJ. He is the current Co-Chair of the Elder Law Section of the Middlesex County Bar and is listed in NJ Super Lawyers in the Estate Planning and Probate Practice area. Michael concentrates in tax, estate planning, estate administration, elder law and tax controversies. Mr. Feinberg is a frequent lecturer on, and author of, various estate planning and elder law topics. He specializes in planning for incapacity and the availability of government benefits, while maximizing asset preservation.

Please RSVP to Pamela at  mailto:pma@ua-cpas.com

Bagel breakfast will be served!

Home Equity Loan Interest is Still in Play in 2018

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Most of us will agree that our biggest investment is in our home. So, it shouldn’t surprise you that your house or condo is your first port-of-call whenever there’s a need to borrow money. And the easiest way to draw funds against the security of real estate is by arranging a Home Equity Loan.

Home Equity Loans have New Limitations

Home Equity funding helps us in important ways:

  • Number one, the interest rates payable on this type of loan are arguably the lowest available.
  • Secondly, you can get the cash working for you quickly with the least bother, paperwork and tedious protocol.
  • Then there’s the third big reason: help from Uncle Sam.

Up to now all interest payments on a Home Equity Loan were tax-deductible. It made borrowing almost a no-brainer! Who wouldn’t opt for already-low interest rates to be pulled even lower? Benefits like this are rare in our modern world where it seems like everything, including financing fees, are only going up.

Well, it’s time for a retake on the “Uncle Sam thing”: the new taxation laws as per the Tax Cuts and Jobs Act of 2017, enacted in December of the same year, have removed some delectable treats from the traditional “Home Equity feast”.

Is it likely to change your borrowing behavior anytime soon? No, but it should give you pause. There’s a certain logic to it that really can’t be argued with.

Here are the new Home Equity items to keep in mind:

  • The amount you can borrow is tied to the value of the residence, be it a primary or secondary home. The I.R.S. has decided that your total loan value cannot be more than the original cost of the home (plus the cost of substantial improvements) as a start.
  • And in combination with all other mortgages cannot exceed $750,000. So Home Equity lending is not the bottomless well some may believe it to be.
  • Tax breaks haven’t disappeared but at the same time, they simply are not what they used to be. Any Home Equity draws you make from now on have to be used to build, renovate or essentially improve your residence to qualify the interest payable on them for a tax deduction.

On this last point, for example: if you use your new funds to pay off student loans, reduce your credit card debt or splurge it on a vacation, nobody is going to stop you. What they are going to stop is anyone claiming tax relief for this type of expenditure for the foreseeable future.

Don’t hesitate to consult with our professional tax team when it comes to making your Home Equity decisions, or to clarify your thinking on any tax matter. We often see benefits buried under the “strict letter of the law” – we could make a difference.

Inherited an IRA? Look Before you Leap!

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If you inherit a traditional individual retirement account (IRA), you also may inherit a large income-tax burden. How you choose to receive the money will be a

Do Not Pass GO without a Consultation

big factor. If you don’t need the money right away, there are ways you can defer or spread out the tax burden.

When You Are the Surviving Spouse

If you are the deceased IRA owner’s surviving spouse and beneficiary, you have several ways to defer income taxes on the money. One way is to roll over the inherited IRA into your own new or existing IRA. A rollover allows the assets to continue to grow tax deferred until you reach age 70½. Then, annual IRA withdrawals become mandatory.

When You Are Not the Surviving Spouse

The IRA distribution rules differ when you aren’t the spouse. But you can still spread out the tax burden. One option may be for you to receive annual distributions from the IRA based on your life expectancy. This will spread out the distributions — and the taxes — over a number of years. The younger you are, the longer you can stretch out the payments, and the longer the money can stay in the account and benefit from potential tax-deferred growth. This particular option is not available if the account had no designated beneficiary.

Inherited IRAs are subject to potential risks, such as tax law changes and the impact of inflation.

Give us a call before you make any moves, so we can help you determine the right course of action for you.

Bong World: Your Ultimate Guide to Bongsb

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Welcome to the world of smoking accessories where quality meets style, and today we’re diving deep into the bong world collection, specifically focusing on the iconic Bongsb series. Whether you’re a seasoned smoker or just getting started, this guide will help you navigate through the different features and benefits of these top-notch bongs.  

Discovering the Beauty in Simplicity: The Bongsb Lineup

  When it comes to choosing a bong, there’s no shortage of options out there, but the Bongsb lineup stands out for its sleek design and functionality. Each piece in the collection is crafted with precision, ensuring a smooth smoking experience every time. From the classic straight tube to the more intricate percolator designs, Bongsb offers something for everyone. What really sets them apart, though, is their commitment to using high-quality materials that not only enhance your experience but also last longer than most other brands out there.  

Where to Get Your Hands on the Best Bongsb?

  If you’re ready to upgrade your smoking setup, look no further than Shop Cool Grinders. This online store is your go-to destination for all things Bong World, including the entire range of Bongsb. They offer a wide variety of styles, sizes, and colors, so you can find the perfect match for your personal taste and needs. Plus, their customer service team is always on hand to answer any questions you might have, making the shopping process as easy and enjoyable as possible.   Navigating through the vast array of smoking accessories can be overwhelming, but with our guide and the high standards set by Bong World, you’ll surely find the right fit. Remember, investing in a good bong means investing in an experience – one that’s smooth, enjoyable, and tailored just for you. So why wait? Dive into the Bongsb collection today and elevate your smoking game to new heights!