Accelerate income into 2020.

Convert Traditional IRA to Roth IRA to avoid tax on converted assets and appreciation on such assets.

Current capital gains rates*:
$0 – $40,000 = 0%
$40,001 – $441,450 = 15%
$441,451+ = 20%

*Rates above do not include 3.8% net investment income tax.

Realize long-term capital gains to lock in current rates.

Reinvest capital gains proceeds in qualified opportunity zone funds before rules potentially reformed.

Defer selling stocks and recognizing losses to future tax years when capital gains may be taxed at a proposed higher rate.

21% corporate tax rate.

Accelerate income into 2020.

Defer deductions until after tax increases enacted.

Accelerate sales of companies.

12.4% Social Security tax on income up to $137,000 for 2020 (adjusted yearly for inflation) with 6.2% paid by the employer and 6.2% paid by the employee, unless self-employed.

Accelerate income into 2020.

No cap on itemized deduction benefit.

$10,000 cap on state and local tax (SALT) deduction.

Interest paid on home mortgage limited to $750,000 of acquisition indebtedness (unless loan existing on or before Dec. 15, 2017)

Charitable contribution limitation generally 60% of adjusted gross income (AGI) modified by CARES Act:

• Cash (100% public charities, 60% donor advised funds/supporting organizations, 30% private foundations)
• Long-term appreciated publicly traded securities (30% public charities, 30% donor advised funds/supporting organizations, 20% private foundations).

Miscellaneous deductions subject to 2% floor suspended.

Itemized deduction cap of 28% for taxpayers with taxable income over $400,000.

Eliminate current $10,000 SALT deduction cap.

Accelerate itemized deductions into a tax year where limitation is not yet implemented.

Consider multi-year bunching strategies.

Consider charitable deduction planning strategies.

20% QBI deduction, subject to limitations and phase-outs.

Consult a tax advisor to plan for any potential changes to QBI deduction rules.

$11.58 million exemption per person scheduled to sunset at the end of 2025.

Gift appreciated assets now to utilize remaining exemptions (see examples below).

Review estate plan to confirm any formula clauses work in light of potential decreases to exemption and plan provides flexibility in light of any potential tax law changes.

Rates ranging from 18% to 40%. Rate for estates over $1 million is 40% plus $345,800.

Implement techniques to reduce taxable estate (see examples below).

Currently, basis of assets passed on to beneficiaries at death is increased to the fair market value of the asset as of the death of the deceased.

Use spousal lifetime access trusts (SLATs) to reduce impact of elimination of basis step-up while utilizing exemption and providing flexibility by allowing grantor’s spouse access to funds, if needed.

Create and fund private foundation with qualified appreciated stock with low basis.

The current environment, which has been accompanied by the COVID-19 pandemic, depressed asset values, volatile markets, and historically low interest rates, presents additional traditional and unique planning opportunities to consider.

Implement an estate plan to make sure affairs are in order.

Review current estate plan to make sure current plan aligns with goals and potential tax law changes.

Consider estate planning opportunities with interest rate based vehicles (e.g., sales to intentionally defective irrevocable trusts (IDGTs), intra-family loans (new or refinanced), establishing grantor retained annuity trusts (GRATs), or charitable lead annuity trusts (CLATs)).

Transfer assets that have declined in value (e.g., use annual gift tax exclusion, transfer interests in a family limited partnership (FLP) or LLC at a discount as a result of lack of control and/or marketability of asset).

Convert Traditional IRA to Roth IRA to avoid tax on converted assets and appreciation on such assets.