February 9th, 2010
Senate leaders appear to now be working on addressing estate tax according to an article with The Hill. As we know, both Houses of Congress failed to act last year to extend the 2009 tax exemption of $3.5 million into the future. Because of this failure, 2010 is the year in which we do not have estate tax, but we have a new, complex system for the allocation of cost basis to a deceased person’s assets when determining capital gains/losses after death.
As with anything in Congress, politics will drive whether the extension is passed. Republican leaders appear to agree to support a jobs bill in exchange for reverting back to the 2009 estate levels. Truth is, the Republicans would prefer to have a larger exemption of $5 million, adjusted for inflation, with a 35% tax rate, as proposed by Senate Minority Whip Jon Kyl (R-Ariz) and Sen. Blanche Lincoln (D-Ark).Â
However, getting a $3.5 million exemption is much better than allowing the rules to play out - an exemption of $1 million with a 55% tax rate!
Tags: Attorney, Clearwater, Estate Planning, estate tax, Joshua T. Keleske, Last Will & Testament, Lawyer, Revocable Trust, Saint Petersburg, Tampa
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January 25th, 2010
This time each year, my wife and I look forward to receiving 1099s and other tax forms so that we can work on our tax return. This year is no different, although we had already projected our tax liability in December, so preparing the return is now just a formality. We knew six weeks ago that we would be getting a refund, which at first blush sounds great. In actuality, though, getting a tax refund is never a good thing.
Tax refunds, after all, are simply the IRS’s return of our money that we loaned them during the previous year. Like loans to friends or family, when the IRS pays back your loan, it does not pay interest!  Â
My advice, then, is to avoid tax refunds to the maximum extent possible. You can do this by reviewing your tax withholding election each year. If your income or deductions have changed from the prior year, then your Form W-4 may need to be adjusted. You can also adjust your Form W-4 throughout the year as your situation warrants adjustment.
Finally, if you know that you are entitled to a refund, then you should file your return as soon as possible. Just because your return is due on April 15th, you do not need to wait to file it. Don’t forget, the longer that you wait to file your return, the longer the government gets to use your money for free!
Tags: Attorney, Income Tax, IRS, Joshua T. Keleske, Saint Petersburg, Tampa
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January 21st, 2010
In the past, the State of Florida sent postcards to business entities registered in the State that reminds them to file annual reports by May 1, 2010 (unless the business is a not-for-profit). I have not received my postcard yet, but did get an email reminder. So, it seems that the State is transitioning out of the postcard business and into the email business in an effort to alert business entities to file their annual reports.
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Failing to filing an annual report and filing fee (discussed below) on a timely basis will result in your business being administratively dissolved by the State, or at a minimum, require the payments of expensive reinstatement and/or late fees.Â
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With the annual report, a filing fee must be submitted. The filing fees are as follows:
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                                                                      Filed by May 1           Filed after May 1
·        For profit corporation:              $150.00                     $550.00
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·        Limited partnership:                  $500.00                     $900.00
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·        Limited liability company:        $138.75                     $538.75
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Information on filing your annual report can be obtained at www.sunbiz.org. In fact, you will need to submit your annual report and pay your filing fee on-line. To do this, you will need the document number assigned to your business by the State. This number can be found by searching the sunbiz website for your business record. Feel free to give our office a call if you would like us to walk you through the filing process.
Tags: Attorney, Business Planning, Florida, Joshua T. Keleske, Saint Petersburg, St. Petersburg, Tampa, Taxpayer
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January 17th, 2010
Over the weekend, I watched an interesting story on the news about the storing of cord blood. The story really had nothing to do with estate planning. Actually, it talked about how some private storage companies for cord blood prey on new parents. I don’t know if this is true or not, although my wife and I saved cord blood when our daughters were born. The chance that this may help them in the future was worth the expense of it.
This story reminded me as an estate planning attorney that cord blood is a valuable asset that should be considered in estate planning arrangements. Same could be said for frozen embryos.
With that in mind, upon your death, the following issues should be considered as a part of your planning:
- Be sure to list where your cord blood is presently stored and its annual cost for storage;
- Be sure to keep that list along with your asset listing so that your family will know that you are maintaining cord blood for potential future use;
- If you wish to leave your cord blood to anyone in particular, you can do so using a separate writing as a part of your estate planning. Alternatively, you could include a directive in your Florida Will or Florida Revocable Trust which states who will receive those items.
Of course, given the importance of cord blood, stem cells and the like, it can be much more worthwhile than any amount of money that you could leave to your family! Â
Tags: Attorney, Clearwater, Estate Planning, Family Estate Plan, gifting, Joshua T. Keleske, Last Will, Last Will & Testament, Lawyer, Saint Petersburg, St. Petersburg, Tampa
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January 11th, 2010
For the first time, beginning in January 2010, taxpayers with adjusted gross incomes of more than $100,000 will be allowed to convert a traditional IRA to a Roth IRA. In the past, taxpayers with higher incomes were excluded from this possibility.
Roth IRAs allow non-deductible contributions to grow and be distributed tax free if certain requirements are met. An advantage to converting in 2010 is that you have the choice of either reporting the taxable income in 2010 or delaying the tax payment and reporting the taxable income equally in 2011 and 2012. Conversions in 2011 and beyond will require you to report the tax for the year of conversion.
Converting to a Roth IRA may be advantageous to you, as well as your beneficiaries, but there are tax implications and many other factors to consider. As with all tax-related decisions, consult with your tax and legal advisor to see if a Roth IRA makes sense for you.
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January 4th, 2010
If you have been reading this blog for any length of time, then you know that my dad died at a young age. I have some memories, but frankly I was 4 years old when he died so those memories are a bit fuzzy. Fortunately for me, we have some nice pictures and the like. One of my favorite thing of his is a set of old golf clubs from the 1970s.Â
I actually used his PW for a while, but I was afraid that I would break it so I stopped. Truth is, the first time I used it, I chipped one in, so I know that it carries with it something special. So for now, it sits in storage, but maybe some day it will be in a shadow box or something similar. These cool things from my past are ones that my mom gave me several years ago. I was lucky to have been given them, but he died in 1980 when things were a bit different than they are today.
Today, people find over the silliest of things, usually after someone has died and in an effort to “get what’s coming.” I think that is very sad. What’s more sad, though, is a lack of planning to minimize some of that fighting. Simple directions in a Last Will could create legal certainty as to the disposition of certain items, like golf clubs.Â
The most basic of directions could be a blanket statement that you wish for a person to receive your personal items. You can also add specific directions in a form that Florida calls a “Separate Writing.”  These forms allow you to list in as much detail as you wish who gets each personal item that you own.  All you need to do is sign and date this form so that it is legally binding on your family.Â
One more thing, your Will needs to authorize its use as well. This is a standard provision in a Will, but if you don’t have a Will, then I guess it is not standard to you.  So, what’s the point? Get your Will done today, and starting working on your list of personal items. While you might not be able to eliminate the fighting after you are gone, you can, at least, give some good directions to your family. If common descency prevails, then your wishes can be honored.
Tags: Attorney, Clearwater, Estate Planning, Florida, Joshua T. Keleske, Last Will, Last Will & Testament, Lawyer, Saint Petersburg, Separate Writing, Tampa
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December 30th, 2009
In less than 48 hours, we will have something that we, as a country, have not had for several decades - no estate tax. As an article in MSN.com points out, families around the country with loved ones dying are faced with an ethical dilemma - do they plug the plug now when the estate tax exemption is $3.5 million or do they want a few days when we will have no estate tax?
Since the estate tax only affects 5,000 - 6,000 taxpayers each year, the reality is that this is really is not much of a dilemma. Unless, of course, you are in one of those families over the Holidays. Interestingly, a few weeks ago, one of my clients was relaying a story from a few years ago in which she called her dying mother on January 1, 2006 to see if mom was still alive. This was important since the estate tax exemption increased from $1.5 million in 2005 to $2.0 million in 2006. This difference results in a tax reduction of over $200,000!
Since Congress has not acted, it would appear that we will have a period of time with no estate tax. With that said, it is entirely possible that Congress will act in the first quarter of 2010 to extend the 2009 exemption into the future. The question then is whether the law change will be retroactive. If it is made retroactive to the first of the year, then litigation is bound to result.
In the meantime, here are the rules (until the government changes them again):
1. There will be no estate tax for 1 year. Then the tax returns in 2011 for estates over $1 million. The rate will be 55%
2. There will be only a limited step-up in basis for assets owned at the time of death. Under current law (through Dec 31, 2009), the assets of a decedent get a step-up in basis to the fair market value at date of death (or 6 months later in certain instances). This eliminates capital gains taxes if assets are subsequent sold for the date of death value. In 2010, the step-up in basis is limited to $1.3 million for the overall estate, plus $3 million for assets transferred to a surviving spouse or a tax trust established solely for a surviving spouse.
Tags: Attorney, Clearwater, Estate Planning, estate tax, Family Estate Plan, Joshua T. Keleske, Lawyer, Saint Petersburg, South Tampa, Tampa, Tampa Bay
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December 28th, 2009
If you own a Florida corporation, you probably know that you need to keep your business checking account separate from your personal funds and maintain good accounting records. These efforts will help to insulate you, the owner of a business, from its liabilities. But, did you know that there is more to it than that from a legal perspective?
The legal requirements to maintain a corporation in Florida generally make it necessary for the shareholders and the Board of Directors to hold annual meetings to discuss the corporation’s activities, ratify decisions from the prior year and appoint officers to act in the coming year.  If you are like most of our clients who own businesses, you probably have informal meetings on a weekly, if not daily, basis. As a result, the use of a formal meeting may be burdensome.  As a result, Florida law provides an alternative to formal meetings — Written Actions in lieu of meetings.Â
These written actions could be specific, such as approving a new bank loan or lease. Or they can be general, ratifying the business decisions of the corporation from the prior year and appointing officers to serve in the coming year. In either case, written actions are very important and should be included in your corporate records on an annual, if not more frequent, basis.
Tags: Attorney, Business Planning, Florida, Florida corporation, Joshua T. Keleske, Lawyer, St. Petersburg, Tampa, Tampa Bay
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December 25th, 2009
From our families to yours, we wish you a very Merry Christmas!
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December 21st, 2009
Joel Stephens of Thomas Financial was kind enough to share this story with me about Hillsborough County School District, which I reproduce on this blog:
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Hillsborough County School District (HCSD) has been awarded $100 Million dollars from the Bill and Melinda Gates Foundation. This is the largest private gift ever made to a single K-12 district. The Gates Foundation ultimately selected four districts across the country (Tampa, Pittsburgh, Memphis and Los Angeles) to award a significant educational grant.
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The initiative is titled “Intensive Partnerships to Empower Effective Teachers.” This seven-year effort, which will ultimately have $200 Million invested in Hillsborough County, will focus on improving student achievement by ensuring each student has high quality teachers. Other than parents, a teacher has the single most influential impact on a student’s success within our education system, and this initiative is laser focused on changing the way teachers are mentored, evaluated, paid, etc. Hillsborough County is a large district (8th largest in the country) which will be an incubator to develop processes which can then be replicated in school districts across the country.
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The Bill and Melinda Gates Foundation and their team of professionals are not just “throwing money” at a broad need. They have been very specific in this, as well as other initiatives, such as curing Malaria and AIDS, and have done an enormous amount of due diligence to determine what makes the highest impact before they award a grant. In addition, part of the requirement is that their team of professionals stays intricately involved. For instance, in this initiative with the HCSD, a leader from the Gates Foundation is actually moving to Tampa for the next seven years, and other professionals from the Foundation will be visiting at a minimum of every month along the way.
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Thank you Gates Foundation for helping to improve our Community!
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Tags: Attorney, Joshua T. Keleske, Lawyer, Tampa
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