The Tax Cuts and Jobs Act increased the standard deduction to $12,000 per person and $24,000 per couple (for 2018 and inflation-adjusted thereafter). This was great news for those who don’t itemize their deductions. However, for those itemizing deductions, there was some bad news in the new law, too. The law included a cap of $10,000 (not inflation adjusted) for state and local taxes (“SALT”), such as state and local income and real property taxes. The $10,000 limitation is the same for single … [Read more...] about SALT Deduction Limit…Can You Get Around It?
A prior blog discussed the taxation of trusts generally and that they could be taxed as either grantor trusts or nongrantor trusts. This blog will focus on the advantages and disadvantages of taxation as a nongrantor trust. Unlike a grantor trust, which is taxed to the grantor, a nongrantor trust is taxed as its own separate taxpaying entity. The trustee of the trust has the trust file its own tax return, Form 1041. On that return goes all the trust’s items of income and expense. The … [Read more...] about Nongrantor Trusts Can Be Very Useful in Certain Situations