6
tax cuts at that time. During the next two years, the low tax rates may provide planning opportunities for taxpayers to save money on income, estate and gift taxes. For example, some individuals who have been holding on to highly appreciated property may wish to sell the property during the next two years to take advantage of the low capital gains tax rate. Other taxpayers may wish to make taxable gifts to their children or grandchildren and take advantage of the $5 million exemption or pay the relatively low gift tax in order to avoid potentially higher gift or estate tax rates in the future. Other people my wish to review their estate plan with their attorney to determine if there are further ways to reduce their estate tax risk by taking advantage of the low gift tax rates for the next two years. Given these changes in the law, now is an excellent time to review your current financial situation and estate plan with your attorney to determine what changes, actions or planning may be taken to further reduce or eliminate your estate and gift tax risk. President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 into law on December 17, 2010 (the 2010 Tax Relief Act). In addition to providing an immediate benefit of tax cuts to taxpayers, this law provides potential tax planning opportunities for businesses and individuals. Among other things, the 2010 Tax Relief Act: Extends the EGTRRA income tax rates for all taxpayers Extends the EGTRRA capital gains tax cuts for all taxpayers Cuts payroll tax rates for a one year period Provides a $5 million exemption for estate taxes and caps the highest gift and estate tax rate at 35% Had Congress not passed this law, the tax rates would have increased for all individuals beginning on January 1, 2011. Rather than permitting the tax cuts to expire, Congress decided to extend the EGTRRA tax cuts for an additional two-year period. Congress also temporarily cut the highest estate and gift tax rate from 55% to 35%, and increased the amount that can pass free of the estate tax at an individuals death from $1 million to $5 million for this same two-year period. However, these tax cuts and changes are not permanent. The tax cuts will automatically expire on December 31, 2012. Therefore, as of January 1, 2013, the income tax rates and estate and gift tax rates will revert to 2001 levels unless Congress decides to further extend the MARCH 2011 Hyden, Miron & Foster, PLLC stands ready to assist you with the new issues that abound in tax, estate, trust, business and litigation matters. The Tax Installment is only part of our commitment to serve our clients and friends. Our goal is to help keep you up- to-date on your financial lifes ever- changing options. You remain our top priority, and we look forward to serving you for years to come. New Tax Law Provides Opportunities

MARCH 2011 New Tax Law Provides Opportunities · Section 179 Expensing Limits. Section 179 of the Internal Revenue Code permits taxpayers to deduct the entire cost of certain tangible

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Page 1: MARCH 2011 New Tax Law Provides Opportunities · Section 179 Expensing Limits. Section 179 of the Internal Revenue Code permits taxpayers to deduct the entire cost of certain tangible

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Page 2: MARCH 2011 New Tax Law Provides Opportunities · Section 179 Expensing Limits. Section 179 of the Internal Revenue Code permits taxpayers to deduct the entire cost of certain tangible

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Page 5: MARCH 2011 New Tax Law Provides Opportunities · Section 179 Expensing Limits. Section 179 of the Internal Revenue Code permits taxpayers to deduct the entire cost of certain tangible

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Page 6: MARCH 2011 New Tax Law Provides Opportunities · Section 179 Expensing Limits. Section 179 of the Internal Revenue Code permits taxpayers to deduct the entire cost of certain tangible

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