We have received several calls on the proposed $3 million cap on 401(k)s and IRAs. Some of those discussions have been spirited.
What is it? Equally important, what is it not?
The proposal comes from the White House budget. Here is some text:
"The budget will also show how we can provide targeted tax relief to strengthen the economy, help middle class families and small business and pay for it by eliminating tax loopholes and make the tax system more fair. The budget will include a new proposal that prohibits individuals from accumulating over $3 million in IRAs and other tax-preferred retirement accounts. Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving. The budget would limit an individual's total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per person per year in retirement, or about $3 million in 2013."
I am reviewing a tax case involving estate taxes, generation-skipping taxes, a Cincinnati family, and a beer brand only recently brought back to the market. Let's talk about it.
John F. Koons (Koons) owned shares that his father had bought during the 1930s in Burger Brewing Co., a Cincinnati brewer known for its Burger beer. The Cincinnati Reds broadcaster Waite Hoyt nicknamed a deck at Crosley Field (where the Reds then played) "Burgerville."
Are you old enough to be eligible for Social Security retirement benefits, married, and still working? If so, you need to know about the Social Security file and suspend strategy.
You probably know that your Social Security benefits will increase if you postpone taking them. For example, if you are still working after your full retirement age (currently 66) you can delay claiming your Social Security retirement benefit until you are age 70. This can mean a significant increase in the monthly amount you will eventually receive (and the widow's benefit your spouse may someday get).
Your monthly benefit will be higher because you acquire delayed retirement credits. You acquire a credit for each month you postpone taking benefits after you reach full retirement age. You can continue to acquire credits until you attain age 70. If you delay taking your benefits until age 70 your monthly check should be 32% higher than if you had started at age 66.
I am going to put you on the spot. I will give you some facts and present a tax issue for you.
Yen-Ling is a U.S. citizen. She is an expat living in Hong Kong. She works international flights for an airline, and her flights include:
Someone walked face-first into this issue with the IRS.
We are talking about Ileana Sonnabend, an avid art collector and a very wealthy woman. She died in 2007, leaving an art collection that included works by Andy Warhol, Jasper Johns and Robert Rauschenberg. Her estate was in the billion-dollar range, prompting her executors to sell pieces from the collection to pay federal and New York estate taxes. Those taxes approached $500 million.
There was a troublesome piece in the collection – Rauschenberg's "Canyon." Rauschenberg was a post – World War II American artist, and some of his work is described as "combine." This means that the work includes different materials, such as Picasso mixing sand into his paints. The issue with "Canyon" is that it includes a stuffed bald eagle.
There are federal laws – the 1918 Migratory Bird Treaty Act and the 1940 Bald and Golden Eagle Protection Act – that says that one cannot traffic in bald eagles, even a stuffed one.
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