Michael Gray, CPA's Tax and Business Insight
May 8, 2013
© 2013 by Michael C. Gray
ISSN 1539-395X
A monthly report to help you prepare for your financial future, keep more of what you earn by minimizing your taxes, and build an extraordinary business!
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Table of Contents
- This Sunday is Mother’s Day.
- Extension season is here.
- Michael Gray live tax planning presentation for pros.
- Tax reform “buzz” in Washington.
- Financial Insider Weekly broadcast schedule.
- Visit our new article: The Language of Trust.
- Follow me on social media!
- Do you have employee stock options?
- Do you have real estate tax issues?
- Check out my blog.
- PS Marché Aux Fleurs
- Subscribe/Remove from Michael Gray, CPA's Tax & Business Insight
My grandniece Britany Marisco with her new husband, Christopher, at their wedding reception. This Sunday is Mother’s Day.
Now is the time to honor and express appreciation to your mother and other mothers who have contributed to your life. Remember Mother’s Day this Sunday, May 12.
Extension season is here.
If you would like us to prepare your extended 2012 income tax returns, please call Dawn Siemer Mondays, Wednesdays or Fridays from 9 a.m. to 5 p.m.
We can also prepare amended income tax returns to clean up tax returns that were previously filed.
Attention tax professionals! Michael Gray live tax planning presentation.
Michael Gray will give a luncheon presentation to the Santa Cruz Discussion Group of the Silicon Valley, San Jose chapter of CalCPA. The title is “Income tax planning in a new tax environment.” It will take place from noon to 1:30 p.m. on Thursday, June 13 at Michael’s on Main in Soquel. The investment is $20 for CalCPA members and $25 for nonmembers. For details, see the CalCPA web site resources, www.calcpa.org, local chapters or call Stephanie Stewart at 408-983-1122.
Tax reform “buzz” in Washington.
Mark Twain once said, “Nobody’s life, liberty or property is safe while Congress is in session.” Tax reform proposals are being “floated” from Congressional hearings. For example, it has been suggested the mortgage interest deduction should be further reduced. It has also been suggested that long-term capital gains and dividends should be taxed at the same rates as ordinary income.
The last time I remember long-term capital gains being taxed at ordinary income rates is when the Tax Reform Act of 1986 was passed under the Reagan Administration, almost 30 years ago. It didn’t last long after Ronald Reagan left office.
President Obama has also proposed the estate tax exemption should be reduced from $5 million to $3.5 million.
It is said Senator Baucus, chairman of the Senate Finance Committee, wants tax reform to be his legacy because he is planning to retire soon.
All of this talk makes it very hard to plan. We don’t know what our tax laws will be, even for the short term.
It appears to me that with a Democrat Senate and a Republican House of Representatives, it’s unlikely any significant reform can be enacted.
If you want to be defensive, continue aggressive gift planning and take your long-term capital gains now. (Watch the 3.8% tax on net investment income!) Now may be a good time to take gains by selling a business or real estate.
Be sure to consult with a tax advisor about the tax bill you are generating. With higher tax rates at different thresholds and the phaseout of itemized deductions, computing the tax can be confusing.
On the other hand, you probably will be OK ignoring all of the talk and assuming there won’t be a major tax change for the immediate future. (Don’t let the tax tail wag the dog.)
Financial Insider Weekly broadcast schedule for May and June.
Financial Insider Weekly is broadcast in San Jose and Campbell on Fridays at 8:00 p.m., Pacific Time. You can watch it on Comcast channel 15 for San Jose and Campbell. The show is broadcast as streaming video at the same time at www.creatvsj.org.
Here are the scheduled interviews for April and May:
- May 10, 2013, attorney James V. Quillinan of Hopkins & Carley, “Estate planning with portability of a deceased spouse’s federal estate and gift tax exemption amount”
- May 17, 2013, attorney James V. Quillinan of Hopkins & Carley, “Tax planning for real estate change of ownership in California”
- May 24, 2013, Don Pollard, CLU, ChFC of Advanced Professionals, “Health insurance for individuals”
- May 31, 2013, Don Pollard, CLU, ChFC of Advanced Professionals, “Group health insurance plans for small businesses”
- June 7, 2013, attorney David Howard of Hoge, Fenton, Jones & Appel, “Federal reporting requirements for foreign bank and brokerage accounts”
- June 14, 2013, Dick Blakeley, The Blakeley Group, Inc., “Benefits of a virtual family office”
- June 21, 2013, attorney Scott Haislet, “Passive real estate loss limitations and electing to be a real estate professional”
- June 28, 2013, attorney Scott Haislet, “Tax considerations for selling a principal residence”
Financial Insider Weekly is also broadcast as follows:
- Sunday at 5:30 a.m. on Comcast Channel 27 in Santa Cruz County and on Charter Communications Channel 73 in Watsonville and Capitola
- Monday at 1:30 p.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Monday at 3:30 p.m.on Comcast Channel 27 in Santa Cruz County and on Charter Communications Channel 73 in Watsonville and Capitola
- Monday at 4 p.m. and 7 p.m. Pacific Time on cable channel 19 in Morgan Hill and broadcast on the internet at the same time as streaming video at www.mhat.tv
- Monday at 6:30 p.m. on Midpeninsula Media Center, Comcast Channel 28 in Palo Alto, East Palo Alto, Stanford, Menlo Park & Atherton
- Monday at 7:30 p.m. on Comcast channel 15 in Saratoga
- Tuesday at 4 p.m. and 7 p.m. Pacific Time on cable channel 19 in Morgan Hill, Broadcast on the internet at the same time as streaming video at www.mhat.tv
- Tuesday at 9 p.m. on Comcast channel 26 and AT&T U-verse channel 99 in Marin County.
- Wednesday at 3 p.m.on Comcast channel 27 in Santa Cruz County and on Charter Communications Channel 73 in Watsonville and Capitola
- Wednesday at 8 p.m. on Comcast channel 28 in Hayward, Alameda and Fremont and on AT&T U-Verse Channel 99, Hayward public access TV 28 in California
- Thursday at 5:30 p.m. on Comcast channel 27 in Santa Cruz County and Charter Communications channel 73 in Capitola and Watsonville
- Friday at 11:30 a.m. on Comcast channel 27 in Santa Cruz County and Charter Communications channel 73 in Watsonville and Capitola
- Friday at 1:30 p.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Friday at 3:30 p.m. on KCAT, Comcast channel 15 in Los Gatos
- Friday at 4 p.m. on cable channel 15 in Cupertino, Los Altos and Mountain View.
- Friday at 6 p.m. on Comcast and Astound channel 29 in San Francisco, online streaming video at www.bavc.org, "public access TV"
- Friday at 8 p.m. on Comcast channel 28 in Hayward, Alameda and Fremont and on AT&T U-Verse Channel 99, Hayward public access TV 28 in California
- Saturday at 9 a.m. and 6 p.m. on Midpeninsula Media Center, Comcast Channel 28 in Palo Alto, East Palo Alto, Stanford, Menlo Park & Atherton
- Saturday at 1:30 p.m. on Comcast channel 26 and AT&T U-verse channel 99 in Marin County.
Past episodes are available at https://www.youtube.com/user/financialinsiderweek.
Let me know any ideas that you have for topics or guests. Guests will usually have to be located in or near the Silicon Valley in California.
Hope you can watch or record the show. Please tell your friends about it!
Michael Gray regrets he can no longer personally answer email questions. He will answer selected questions in this newsletter.
For your questions about dependent exemptions, see IRS Publication 501 at www.irs.gov.
Visit our new article!
- The Language of Trust Book Review
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Check out my blog.
I have also started a blog at michaelgraycpa.com. Check it out!
P.S.
My daughter and her husband, Holly and Dan Baker, have a Southern French Restaurant at 23 Ross Common, Ross, California, about 15 minutes north of the Golden Gate Bridge. The name of the restaurant is Marché Aux Fleurs and their website address is marcheauxfleursrestaurant.com. For the best meal of your life, call 415-925-9200 for a reservation and give them a try! For directions, visit our website at www.taxtrimmers.com/directions.shtml.
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