Wednesday, August 3, 2016

How to use trusts to save big-time on state income taxes

  Most tax strategies center on minimizing federal income taxes, since they account for the lion's share of taxes a person might owe. But in some states, income-tax rates are themselves in the double digits and can add mightily to tax bills.
Over the last decade or so, one strategy has been gaining in popularity among wealthy individuals and families and their tax advisors. They use trusts to limit their exposure to state income-tax rates. ING trusts, which stands for incomplete gift non-grantor trusts, can shift the tax exposure out of a high-tax state, such as California, to a state with no state income tax, such as Delaware, Nevada and Wyoming.

Glass-Steagall's return threatens Wall Street

That's the big takeaway from a Keefe, Bruyette & Woods report issued over the weekend, which looks at the prospects and ramifications of bringing back Glass-Steagall, legislation that put a wall between commercial and investment banking but was done away with in the late 1990s.
Glass-Steagall unexpectedly jumped back into the political conversation when Republicans referred to their desire to bring back elements of the legislation in July as part of their campaign platform. Democrats doubled down, and said they want to restrict Wall Street banks more. Not everyone is happy about the shift, and KBW analysts say it's not a good deal for most on Wall Street, including stockholders.

"Investors should not view the reinstatement of Glass-Steagall as a potential way to unleash value in large banks," they wrote. "A Congressional approach to breaking up the banks would not be based on economic value creation, but be based on the politics of applying penalties to the largest banks."

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