Saturday, February 4, 2023
Tuesday, January 31, 2023
The reported increases in statutory figures for 2023 are:
|Spouse's intestate share||2102, MCL 700.2102||273,000|
|Spouse's intestate share||2102, MCL 700.2102||182,000|
|Homestead allowance||2402, MCL 700.2402||27,000|
|Exempt property||2404, MCL 700.2404||18,000|
|Family allowance||2403, MCL 700.2403||33,000|
|Small estates||3982, MCL 700.3982||27,000|
|Sworn statement||3983, MCL 700.3983||27,000|
|Terminating small trusts||7414, MCL 700.7414||91,000|
Saturday, January 7, 2023
Happy New Year to all!
Federal figures that will apply for the living and those who die in 2023:
- The per-person amount that is exempt from gift reporting requirements: $17,000.
- The estate/gift tax exemption equivalent is now $12.92 million per person.
The State of Michigan will announce updated probate figures later this month at this site.
Sunday, November 13, 2022
TMZ has a story this morning: "Aaron Carter died without a will... so now the State of California will decide who inherits his estate."
This is commonly found on lawyers' web sites and blog posts. "If you don't have a will, the state will decide." It is untrue.
Each state has intestacy statutes, which provide a priority of inheritance if a person dies without a valid will. Those intestacy provisions apply only to "probate assets," that is, assets owned by the decedent in his own name. They do not apply to assets held in trust, to jointly-owned property, to property with transfer on death directions, or to retirement accounts (unless the owner did not make a beneficiary designation.)
What is true is that, if you do not want that order of priority followed, you need a will, a trust, or some other mechanism to make sure that does not happen.
The intestacy statute is intended and designed to follow what most people would want to happen to their money. The priority is, in general, spouse, children, parents, siblings, their children (nephews and nieces), grandparents, and their descendants (cousins).
It is emphatically not the case that a probate judge in California will make a decision about who will receive Carter's assets. The court will simply follow the intestacy laws.
Saturday, October 29, 2022
Friday, June 10, 2022
From Bloomberg: The IRS is coming for your Venmo income. The IRS is reported to have imposed a new requirement for Form 1099-K, on which an "online payment settlement entity" will be required to report any payment over $600 (down from the previous $20,000). The story begins with "Lexi," who frequently buys items at garage sales and flea markets and sells them on eBay, making as much as $15,000 per year. Up to now, that income has been tax-free for her - because she has not reported it.
The IRS is not changing the tax laws. Any time that you buy something for $x and then sell it for $x+y, the $y is regarded as a capital gain, and tax has to be paid on capital gains. It is up to you to keep track of how much you paid for the item and how much profit you made on the sale.
For a single person, long-term capital gains are taxable only if your income is over $40,000 or so. These rates require that the item be held for a year or more before it is sold. If it is sold earlier than that, the gain is taxable at ordinary income rates.
More information from the IRS is available at its About Form 1099-K page.
Update: In early January, the IRS announced a one-year delay in implementing this new policy.
Monday, May 30, 2022
If you acquire a unit of a cryptocurrency by purchase, there is no income recognized and no income tax owed. You have traded dollars for other units at the then-effective price. The purchase price becomes your cost basis for purposes of determining later capital gains or losses.
Cryptocurrency that has changed in value since it was originally acquired generates capital gains or losses whenever it is spent or converted. It is a long-term capital gain (or loss) if it is held for more than one year, and the act of spending it or converting it results in the recognition of that gain (or loss), with an accompanying tax obligation. Depending on your income level, the tax on a LTCG is 0%, 15%, or 20%.
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From Bloomberg: The IRS is coming for your Venmo income. The IRS is reported to have imposed a new requirement for Form 1099-K, on which a...