Arizona Taxation

A grantor trust is a trust in which the grantor, sometimes called a settlor or trustor, retains an interest. One particular type of grantor trust, called an intentionally defective grantor trust (IDGT), leverages disparities in the federal income and estate taxes to provide opportunities for tax, Medicaid, and asset protection planning.

Although many new business owners who will actively participate in their businesses choose to organize limited liability companies (LLCs) as opposed to incorporating S-Corporations because of, among other things, greater flexibility and the lack of state-required reporting formalities, there is at least one potentially compelling reason to incorporate an S-Corporation, or at least elect taxation as an S-Corporation under Subchapter S of the Internal Revenue Code (IRC): potentially lower employment taxes.

Tax basis in the amount upon which taxable gain or loss, if any, will be calculated on the occurrence of various events, including but not limited to the disposition of an asset or sale of an interest in an entity.

Late last night, the U.S. House of Representatives approved the bill, passed by the U.S. Senate on December 31, 2012, that will become the American Taxpayer Relief Act of 2012 ("ATRA"). President Obama is expected to sign the bill into law today.

The federal estate tax only applies to those estates whose value is in excess of a specific amount, often called the federal estate tax exemption. If the estate's value is less than the federal exemption amount, it is not subject to the federal estate tax. However, if the estate's value is above the federal exemption amount, any amount above the exemption is taxed at one or a series of rates.

Brief, non-comprehensive illustrated description of some potential economic effects associated with policies to ease the so-called "fiscal cliff".

As the end of 2012 approaches and the bus appears headed off the “fiscal cliff,” one estate planning strategy seems to be taking center stage among more affluent taxpayers.

The much-discussed “fiscal cliff” facing the United States is the result of federal tax and spending policy changes that will become effective January 1, 2013, caused largely by the following: 1) the expiring “Bush tax cuts,” 2) the Patient Protection and Affordable Care Act (often called “Obamacare”), and 3) the Budget Control Act (passed in 2011 to increase the debt ceiling).

Beginning in 2013, the Affordable Care Act will impose a 3.8% surtax on some types of income, subject to certain thresholds. However, the applicable threshold and the manner in which the surtax is calculated varies depending upon whether the taxpayer is an individual or an estate or non-exempt trust.