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Estate Tax Changes
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Brentmark® Software provides personal financial planning products and services for professionals and consumers: estate, financial, and retirement planning software; informational web sites (such as NewRMD.com and RothConversions.com); and online calculations (CalcTools.com). Software products include Retirement Plan Analyzer, Estate Planning Tools, PFP Notebook, Retirement Distributions Planner, Kugler Estate Analyzer™, Income Strategy Generator™, Charitable Financial Planner, Estate Planning QuickView, and Savings Bond Toolkit.
New York Estate Tax Changes
Many of Brentmark's programs include the State Death Tax Manager which calculates state estate tax and inheritance taxes. New York State made extensive changes to their estate tax in April. During the week of April 21st, Brentmark will release a new state death tax data file that will incorporate the changes. When available, the new state death tax data file may be downloaded using the Download Latest Data feature in the State Death Tax Manager. It will also be available at StateDeathTax.com.
Most Brentmark programs are available for
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Retirement Plan Analyzer
v. 2013.11 was released on 4/9/13 (with
v. 2013.10 released on 1/25/13
to update the program for the American Taxpayer Relief Act of 2012).
A version 2013.00 or later to 2013.11 patch
file is available to download.
Retirement Plan Analyzer is one of Brentmark's best-selling
programs. The program is compliant with
the Pension Protection Act of 2006.
The Income Strategy Generator™ v. 3.00 (previously known as Retirement Income Navigator™) was released on 11/5/08. Income Strategy Generator™ offers a methodology for managing money during the income drawdown period of retirement. It uses an asset allocation approach (the ISG™ methodology) for optimizing retirement income. It offers many advantages over traditional strategies which do not handle market variability issues very well. The authors have an ISG Planning web site that explains the ISG methodology. The program may be licensed for $299 (download now). The 4th edition (dated 1/29/11) of the authors' book/user manual is available to download.
Estate Planning QuickView v. 2013.00 was released on 1/25/13 to update the program for the American Taxpayer Relief Act of 2012. It includes the State Death Tax Manager feature which handles state death tax calculations (estate taxes and inheritance taxes) for all 50 states and D.C. It allows you to download the latest state death tax calcs so that you will always have current state death calculations. The program may be licensed for $249 (download now).
The Brentmark Update System v. 2010.00 is available as a download. It displays program specific information on changes (such as new features and bug fixes) found in available downloadable patch files as well as information on impending upgrades. It is recommended that all users of Brentmark software products install Brentmark Update System v. 2010.00. If you received your Brentmark software product by mail, you have most likely already installed v. 2010.00 of the Brentmark Update System. If you downloaded your Brentmark software, you should download and install the Brentmark Update System. It is recommended that you run the Brentmark Update System at least once a month to be assured that you are running the most recent version of your Brentmark program.
Planning Tools version 2014.00 was
released on 2/13/14. Estate Planning Tools includes over 100 estate and
financial planning models. A prior user manual
is available to download.
PFP Notebook generates a complete
personal financial plan. Version 2013.01 was
released on 3/27/13 (with v. 2013.00
released on 1/23/13).
A version 2013.00 to 2013.01 patch
file is available to download. The program may be licensed for $595. The
PFP Notebook Quick Start Guide and user manual are available
Charitable Financial Planner v. 2013.00 was released on 1/23/13. In addition to handling split-interest charitable transfers, the program also covers QPRTs, GRATs, and GRUTs. A downloadable demo is available. The user manual is available to download. Charitable Financial Planner licenses for $395 (download now).
For a list of
pension planning and other publications by Seymour Goldberg,
Other Product Information:
|The rates under §7520 (AFRs for
determining the present value of an annuity, an interest for life or a term of years, or a
remainder or reversionary interest) for recent months are as follows (with the 120% Annual
Mid-Term rates in parentheses):
Note: The May rate was added to this site on 4/21/14.
|The §7520 rates (or the precise 120% Annual Mid-Term AFRs, which
are then automatically rounded by the program) are entered in the rates table found in
Estate Planning Tools, Charitable Financial Planner and Kugler Estate
The 120% Mid-Term Applicable Federal Rates for Pre-59˝ retirement plan distributions:
Stretch IRA Limits Proposed
Most non-spouse beneficiaries would lose the ability to stretch out their IRAs under a provision included in a transportation funding bill. See the article, Congress May Crush Key Tool for IRA Inheritors, by Deborah Jacobs (Forbes, 2/8/12) and the pdf for the Description of the Chairman's Modification to the Proposals of the "Highway Investment, Job Creation and Economic Growth Act of 2012". Senate leaders indicated on 2/17/12 that they would abandon the the IRA proposals in the transportation funding bill.
Retirement Planning Taxation Issues
8/13/07 issue of Forbes
included an article,
the Rust Belt, by Ashlea Ebeling,
(registration is required to access the article online although a Google
search for the article title can also find it). The article
discusses numerous tax issues for retirees including state income taxes on
retirement plans, Roth 401(k) issues, real estate taxes, and state estate
Rules for §72(t) Distributions
The rules for pre-59˝ distributions under §72(t) that determine substantially equal periodic payments as described in IRS Notice 89-25 were substantially modified by Rev. Rul. 2002-62. Rev. Rul. 2002-62 allows a one-time change from any existing method to the minimum distributions method. The ruling also limits allowable life expectancy tables to the current IRS tables and requires the reasonable interest rate to be no higher than the 120% mid-term rate. The result of these two changes is to dramatically reduce the amount of permissible withdrawals. The IRS press release is at http://www.irs.gov/pub/irs-news/ir02-104.pdf and the IRS ruling in a PDF file is at http://www.irs.gov/pub/irs-drop/rr-02-62.pdf. In late November, the IRS released FAQs regarding Revenue Ruling 2002-62 which added calculation variations (which are included in version 6.30 and later of the Pension Distributions Planner and the Pension Distributions Calculator). See Brentmark's Discussion of IRS' FAQs Regarding Revenue Ruling 2002-62.
For a discussion of short period distributions (such as monthly payments starting after January), see the article §72(t) Substantially Equal Periodic Payments Made More Frequently than Annually. This article concludes that a distribution of a full year's amount (when the fixed amortization or annuitization method is used) for a short period is a violation of the "substantially equal periodic payments" requirement.
Required Minimum Distributions Rules
The final retirement plan distribution regulations were published on 4/17/02 in Treasury Decision 8987. The final regulations replace the current life expectancy tables used to calculate required minimum distributions with updated tables. The new tables are mandatory for 2003 with 3 different required distribution methods allowable for 2002: the final regs with the new tables, the 2001 proposed regs with old tables, and the pre-2001 (1987 proposed regs) methods with old tables. Click here for the 2002 final regs.
Also available: Sy Goldberg's Planning Analysis: Working with the 2002 IRS Final Distribution
Gregory Kolojeski, Brentmark Software's President, is the author of the Required Minimum Distributions chapter in the Adviser's Guide to Retirement Plans for Small Businesses (a 2010 publication by the AICPA), which is available as a download for $98.75.
American Taxpayer Relief Act of 2012 was signed into law on 1/2/13.
It included a new maximum estate tax rate of 40% and made permanent the
other estate tax changes from the 2010 Tax Relief Act.
The Joint Committee on Taxation technical explanation of
the 2010 Tax Relief Act:
For information on state death taxes, go to StateDeathTax.com which has information and links on the status of state death taxes.
Prior to the passage of the The Economic Growth and Tax Relief Act Reconciliation Act of 2001, the equivalent exemptions for estate and gift tax purposes were as follows:
The 2010 Tax Relief Act was signed into law on 12/17/10. It includes a new maximum estate tax rate of 35%, a new equivalent exemption of $5,000,000 (adjusted for inflation starting in 2012), portability of the unused maximum exclusion between spouses (resulting in a total exclusion of $10,000,000 for the two estates), and a unified gift and estate tax exclusion. These changes apply to 2011 and 2012. The estate tax and income tax changes were added to the following software products in their v. 2011.00 releases: Estate Planning Tools (released on 1/19/11), Retirement Plan Analyzer (released on 2/11/11), Kugler Estate Analyzer™ (released on 3/1/11), Estate Planning QuickView (released on 4/22/11), Charitable Financial Planner (released on 4/29/11), and PFP Notebook™(released on 5/5/11).
The IRS released new actuarial value tables based on a new life expectancy table (Table 2000CM) for income, estate and gift tax purposes. The new actuarial values are applicable starting May 1, 2009 for valuing annuities, life estates, remainders, and reversions. According to T.D. 9448, either Table 90CM or Table 2000CM may be used during the transition period for May and June 2009. To handle this change, Brentmark released updated versions of Estate Planning Tools (5/8/09), Charitable Financial Planner (5/13/09), and Kugler Estate Analyzer (7/6/09).
For the 2009 changes to the RMD rules (which provided for temporary relief from the RMD rules), check out Brentmark's NewRMD.com web site.
In a December 2000 GRAT valuation case (Audrey J. Walton v. Commissioner), the Tax Court agreed with the taxpayer's position that a term GRAT should be valued as a term GRAT and not as a shorter of term or life GRAT as per Example 5 [Sec. 25.2702-3(e), Example (5)] of the gift tax regulations. Furthermore, the court found Example 5 of the regulations to be invalid. The case is also available as a PDF file at the Tax Court web site at www.ustaxcourt.gov.
Click here for more details on The Economic Growth and Tax Relief Act Reconciliation Act of 2001 and for information on when Brentmark software programs were updated.
Click here for information on estate tax changes in 1997 and 1998.
The IRS issued Table 90CM to replace Life Table 80CNSMT effective 5/1/99.
Estate Planning Source Material
We look forward to reading every issue of the Probate Practice Reporter™ which is published monthly (at $295 per year) by Probate Practice Reporter, LLC, USC School of Law, Greene and Main Streets, Columbia, SC 29208 (Phone: (803) 777-7465).
Check out our Links to other web sites with estate, tax, and retirement planning content.
We often get requests for software on topics for which we have not developed a product. Topics include Interrelateds, Business Valuation, IRS Interest & Penalties, Sales Tax and Social Security Benefits (the latter software being available for free!). We have put together a list of Recommended Software covering those topics. Included is information on Cammack Computations' Inter-Est program, which handles interrelated estate tax calculations. For information on QP-SEP Illustrator and SIMPLE Illustrator, click on GSL Galactic Computing.
Free Demo Disks
Demo versions are available for the following Windows programs: Retirement Plan Analyzer, Estate Planning Tools, Kugler Estate Analyzer, Charitable Financial Planner, Retirement Income Navigator, Estate Planning QuickView, Savings Bond Toolkit and PFP Notebook. All the demos are working models (with some values locked-in). Demos for the programs highlighted in black above are available to download now.
To request case studies for any of the programs and a free CD of Brentmark demos, please e-mail your request (with the word Demos in the subject line and be sure to include your postal address) or call 1-800-879-6665. All Brentmark demos are now available on one CD.
Following are ways to reach Brentmark: