Tax and estate planning updates

To our friends who are tax and estate planning professionals, we hope you are enjoying the warmer weather. Here is another list of articles that I hope you find interesting and helpful to your practice. 

First, some articles on Secure Act 2.0, though admittedly, some of them may be/become somewhat outdated post-subsequent interpretations. 

SECURE 2.0 Act of 2022, as enacted Summary of Key Provisions, by Kilpatrick Townsend & Stockton LLP, JD Supra
On December 29, 2022, President Biden signed the Secure 2.0 Act of 2022 (the “Secure 2.0 Act”) into law. The Secure Act 2.0 builds off of the Secure Act, the last major retirement plan legislation enacted at the end of 2019, and brings important changes to retirement plans.

Secure Act 2.0 tax and retirement plan changes for 2023 and beyond, by Travis Sickle, YouTube
Secure Act 2.0 summary for individuals and small business owners.

SECURE Act 2.0: Later RMDs, 529-To-Roth Rollovers, And Other Tax Planning Opportunities, by Jeffrey Levin, CPA/PFS, CFP, AIF, CWS, MSA, Kitces.com
Ultimately, the key point is that while no single change in SECURE 2.0 will require the same level of urgency to consider before year-end changes to clients’ plans as did the original SECURE Act or have the same level of impact across so many clients’ plans as the elimination of the stretch, there are far more provisions in SECURE 2.0 that may have a significant impact for some clients than there were in the original version, making it a more challenging bill for financial advisors and other professionals to contend with (yet providing many new potential opportunities)!

Key tax and retirement provisions in the Secure 2.0 Act, by Alistair M. Nevius, J.D., Journal of Accountancy
The Consolidated Appropriations Act, 2023, P.L. 117-328, enacted on Dec. 29 included (as its Division T) the Secure 2.0 Act, which contains several retirement and tax provisions. The Secure 2.0 provisions mostly focus on expanding coverage, increasing retirement savings, and simplifying and clarifying retirement plan rules, but there are other changes included as well.

Linas Sudzius & Jennifer Lollar: What Financial Professionals Need to Know, by Linas Sudzius, J.D., CLU, ChFC, Jennifer Lollar, J.D., Leimberg Information Services (paywall)
On December 29, 2022, President Biden signed the 2023 Omnibus Appropriations package. The legislation’s main purpose was to continue to provide continuing funding for the federal government to operate. The SECURE 2.0 Act was included in the package. SECURE 2.0 has many provisions in it that will affect clients, especially related to qualified annuities and retirement accounts. This happened while some of us are still trying to absorb information from the proposed regulations related to the first version of the SECURE Act. SECURE 2.0 immediately raises the RMD age for owners of qualified accounts.  It also has dozens of other provisions that have the potential to affect our clients. 

The new PLESA under SECURE 2.0, by Joni Andrioff, J.D., Christy Fillingame, CPA, The Tax Adviser
Pension-linked emergency savings accounts (PLESAs), created by the SECURE 2.0 Act of 2022, can help employees build a fund to cover unexpected expenses and avoid "leakage" from retirement accounts.

Now to some income and estate tax updates and developments. 

Shelter Check: Proactively Finding Tax Minimization Strategies via AI, by Andrew Blair-Stanek, Nils Holzenberger, Benjamin Van Durme, TaxNotes
Artificial intelligence will hopefully one day allow judges deciding tax cases to do a thorough check to ensure that their opinions do not enable new tax minimization strategies. We dub this future software “Shelter Check,” and we are now doing the research to make it a reality. 

10 estate and income tax questions, by Carol Warley, CPA/PFS, J.D., et al, The Tax Adviser
Avoid income tax surprises with these estate considerations and planning points.

Current developments in taxation of individuals, by Katie Bowles, CPA, et al, The Tax Adviser
This semiannual update by members of the AICPA Individual & Self-Employed Tax Technical Resource Panel surveys recent cases, rulings, and guidance involving individual taxpayers.

No basis step-up for grantor trust assets if not in grantor’s estate, by Martha Waggoner, The Tax Adviser
In a revenue ruling issued in March, the IRS confirms that the step-up in basis under Sec. 1014(a) does not apply to the assets held by an irrevocable grantor trust when the grantor dies if the grantor's gross estate does not include the assets of the irrevocable trust.
Stay safe and healthy.

And finally, for your uber-wealthy clients who are worried about their kids becoming spoiled....

Tom Brady worries wealth will keep his kids from growing up grounded: ‘Guys, this is not ... reality’, by Megan Sauer, CNBC.com
NFL quarterback Tom Brady is concerned about his kids’ upbringing: He says he grew up solidly middle class, and his children are being raised on the sidelines of the Super Bowl with private jets at their disposal.

We do not provide legal or tax advice. You should consult their own legal or tax advisor. This information is intended for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services.