{"id":33335,"date":"2020-06-19T11:40:50","date_gmt":"2020-06-19T15:40:50","guid":{"rendered":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/?p=33335"},"modified":"2020-06-19T11:51:06","modified_gmt":"2020-06-19T15:51:06","slug":"business-report-estate-and-tax-planning-during-covid-19","status":"publish","type":"post","link":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/","title":{"rendered":"Business Report: Estate And Tax Planning During COVID-19"},"content":{"rendered":"<figure id=\"attachment_33336\" aria-describedby=\"caption-attachment-33336\" style=\"width: 195px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-33336\" src=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/06\/bond-schoeneck-column-boll-c-195x300.jpg\" alt=\"\" width=\"195\" height=\"300\" srcset=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/06\/bond-schoeneck-column-boll-c-195x300.jpg 195w, https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/06\/bond-schoeneck-column-boll-c-666x1024.jpg 666w, https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/06\/bond-schoeneck-column-boll-c.jpg 720w\" sizes=\"(max-width: 195px) 100vw, 195px\" \/><figcaption id=\"caption-attachment-33336\" class=\"wp-caption-text\">Jennifer M. Boll of Bond, Schoenecke and King PLCC.<\/figcaption><\/figure>\n<p>By Jennifer M. Boll, Esq.<br \/>\nIn the last several months, we have seen the drastic impact of the COVID-19 crisis on our health, way of living and the economy. While these times may feel uncertain, there are still many factors in your control and even opportunities for those who seek them out. This is especially true as it relates to your estate and tax plan.<br \/>\nThe current environment of low interest rates and depressed asset values presents several unique estate planning opportunities for individuals to make the most of their hard-hit assets and leverage the transfer of wealth and business interests. There are a few items to consider.<br \/>\n\u2022 Federal gift tax exemption and annual exclusion remain at all time highs.<br \/>\nIn 2020, the federal gift and estate tax lifetime exemption amount is $11.58 million per individual, and the annual exclusion for gifts is $15,000 per recipient per year.<!--more--><br \/>\nThese figures will remain in effect until 2026, when the lifetime exemption will \u201csunset\u201d and revert back to approximately $5 million (as adjusted for inflation), barring any intervening legislation before then. The IRS has also clarified that individuals making gifts prior to 2026 can do so without concern that they will lose the tax benefit of the higher exclusion level if the current law sunsets.<br \/>\n\u2022 Depressed asset values = opportunity for tax advantaged transfers.<br \/>\nWhether you want to leverage your annual exclusions, preserve your federal exemption or limit your gift tax exposure, the depressed asset values and business interests provide an opportunity to make tax advantaged transfers to other individuals or trusts and allow any future growth to occur outside of your estate.<br \/>\nWhile outright gifts are certainly an option, the transfer of appreciable assets and interests to certain trusts can provide additional benefits and tax advantages that are intensified under the current depressed value conditions.<br \/>\nTrust instruments such as Grantor Retained Annuity Trusts (GRAT), Charitable Lead Annuity Trusts (CLAT) and Intentionally Defective Grantor Trusts (IDGT), are just a few examples of low-risk vehicles that facilitate tax advantaged transfers of appreciable assets while reducing your taxable estate. The advantages of these options are further amplified when the interest rates used in determining the taxability of such transfers are lower.<br \/>\n\u2022 Low interest rates = more efficient tax advantaged transfers.<br \/>\nIn response to the slowed economy, we have seen various interest rates being lowered to stimulate economic growth and to encourage borrowing and investment. This includes reductions in interest rates like the IRS \u00a77520 Rate and Applicable Federal Rates (FAR) that directly affect the taxability of transferring wealth and business interests.<br \/>\nHistorically low IRS \u00a77520 Rate: The IRS \u00a77520 rate, a rate used to determine the gift tax consequences of transfers to trusts like GRATs and CLATs, has reached a historic low of 0.8 percent in May 2020. This is down from 2.8 percent in May 2019, and 3.2 percent in May of 2018.<br \/>\nSimply stated \u2013 the current \u00a77520 rate presents an opportunity to make larger gift-tax advantaged transfers to your beneficiaries.<br \/>\nLow applicable federal rates: We have also seen drastic reductions in the Applicable Federal Rates (AFR), which are used to determine interest charged on below-market value loans and promissory notes.<br \/>\nLow AFR makes this a good time to consider issuing or restructuring loans to family members while also reducing your taxable estate. This method of transfer is most successful if the assets appreciate over the course of the loan in excess of the applicable AFR.<br \/>\nFor owners of closely held businesses, it may also be a good time to consider transferring your closely held business interests to your family members or successors. Tax advantaged transfers of business interests can be accomplished by strategic gifting plans or by a series of sales. While circumstances will vary for each individual and his or her business, in many cases, low AFR will permit larger tax advantaged transfers.<br \/>\n\u2022 Higher deductions for charitable giving = rewards for reducing your estate while giving more to those in need.<br \/>\nThe CARES Act encourages individuals and corporations to \u201cgive more\u201d by increasing tax deductions for charitable donations.<br \/>\nFor individuals who itemize deductions on their income tax returns, it suspends the adjusted gross income (AGI) deduction limitation, allowing individuals to receive a charitable deduction of up to 100 percent of their AGI.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Jennifer M. Boll, Esq. In the last several months, we have seen the drastic impact of the COVID-19 crisis on our health, way of living and the economy. While these times may feel uncertain, there are still many factors in your control and even opportunities for those who seek them out. This is especially [&hellip;]<\/p>\n","protected":false},"author":196,"featured_media":33336,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Business Report: Estate And Tax Planning During COVID-19 - Glens Falls Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Business Report: Estate And Tax Planning During COVID-19 - Glens Falls Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"By Jennifer M. Boll, Esq. In the last several months, we have seen the drastic impact of the COVID-19 crisis on our health, way of living and the economy. While these times may feel uncertain, there are still many factors in your control and even opportunities for those who seek them out. This is especially [&hellip;]\" \/>\r\n<meta property=\"og:url\" content=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/\" \/>\r\n<meta property=\"og:site_name\" content=\"Glens Falls Business Journal\" \/>\r\n<meta property=\"article:published_time\" content=\"2020-06-19T15:40:50+00:00\" \/>\r\n<meta property=\"article:modified_time\" content=\"2020-06-19T15:51:06+00:00\" \/>\r\n<meta property=\"og:image\" content=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/06\/bond-schoeneck-column-boll-c.jpg\" \/>\r\n\t<meta property=\"og:image:width\" content=\"720\" \/>\r\n\t<meta property=\"og:image:height\" content=\"1107\" \/>\r\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\r\n<meta name=\"author\" content=\"jessewinters\" \/>\r\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\r\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"jessewinters\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\r\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/\",\"url\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/\",\"name\":\"Business Report: Estate And Tax Planning During COVID-19 - Glens Falls Business Journal\",\"isPartOf\":{\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/#website\"},\"datePublished\":\"2020-06-19T15:40:50+00:00\",\"dateModified\":\"2020-06-19T15:51:06+00:00\",\"author\":{\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/#\/schema\/person\/b937a48daf87d7a8bd713a73b5d6a1ae\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Business Report: Estate And Tax Planning During COVID-19\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/#website\",\"url\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/\",\"name\":\"Glens Falls Business Journal\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/#\/schema\/person\/b937a48daf87d7a8bd713a73b5d6a1ae\",\"name\":\"jessewinters\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/b496e0843f9d888b12500994b6a8562b?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/b496e0843f9d888b12500994b6a8562b?s=96&d=mm&r=g\",\"caption\":\"jessewinters\"},\"url\":\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/author\/jessewinters\/\"}]}<\/script>\r\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Business Report: Estate And Tax Planning During COVID-19 - Glens Falls Business Journal","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/06\/business-report-estate-and-tax-planning-during-covid-19\/","og_locale":"en_US","og_type":"article","og_title":"Business Report: Estate And Tax Planning During COVID-19 - Glens Falls Business Journal","og_description":"By Jennifer M. 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