Tax Planning Triage – Preparing for the end of 2017

Meeting with individuals shaking hands and making notes on tax planning

Tax planning should be continuous. However, many people procrastinate, waiting until near the end of the year to determine what might be done to reduce or defer taxes. Tax planning is dependent upon individual circumstances, and the considerations discussed below are not universally applicable. That said, these topics are worth discussing with your CPA so…

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New Business Partnership Audit Rules, Coming in 2018

Shea Meehan shaking hands with a client during a business meeting.

The Effects of the Bipartisan Budget Act of 2015 on IRS Examinations of Partnership Returns. New partnership audit rules apply starting in the 2018 tax year.1 The new rules shift some of the burden of federal tax enforcement from the IRS to partnerships under examination. Under the current Tax Equity and Fiscal Responsibility Act (TEFRA)…

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Valuing the Family Farm for Property Tax Purposes Part II

Photo of Farm Land emphasizing the importance of Washington farm tax planning

When the time comes to consider transitioning the family farm, there are some valuation rules which are worth considering. Washington property tax provides a tax savings for lands classified as a farm. The Washington and Federal estate tax regimes provide value reductions for farm property as well. The Federal estate tax may soon become a thing of the past due to President Trump’s recent tax reform proposal, but as of yet the tax is still in effect.

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Valuing the Family Farm for Property Tax Purposes – Part I

Grouping of family farms and property tax considerations

An owner may apply for his or her farm to be valued based on its current use as opposed to its true and fair value. Property tax is assessed on the value of real estate as determined by the county assessor.Generally, Washington real property values are determined based on the “true and fair value” which includes criteria such as sales of similar property within the last five years and potential income uses. The Open Space Taxation Act created three property classifications which allow property to be taxed based on current use value: open space, farm and agricultural land, and timberland. Farm values will be derived from the farm’s earning capacity. This means a farm may be valued as a farm rather than the subdivision it could be.

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Devising Retirement Accounts when Estate Planning

Photo of lawyer working on estate planning paperwork

Generally, your will does not control disposition of your retirement account. A retirement account is a non-probate asset, like a bank account, or life insurance. This means that the disposition of your retirement account is generally not controlled by your will, but instead by the beneficiary designation filed with the plan administrator.

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