Tuesday, May 29, 2012

Low Tax Rates & Low Interest Rates Provide Unique Planning Opportunities

Bush Tax Rates are set to expire at year-end, and, income tax increases in 2013 and later from the phased-in health care legislation, as well as other tax increase proposals advance in Congress, 2012 may be the last years of low tax rates.

Interest Rates (Source Rev. Rul. 2012-15)

Short Term/Demand Less than 3 years - 0.23%
Mid-term Over 3 but not over 9 years - 1.07%
Long-term Over 9 years - 2.61%

With both of these factors in place, Businesses and Individuals may be able to properly plan and benefit from these in 2012. A few examples may be:
  • Refinance and Restructure Business Debt;
  • Bargain Term Employee Loans;
  • Transfer Business Property for Services;
  • Trigger Capital Gains in 2012;
  • Accelerate Qualified Dividends in 2012;
  • Accerlerate income into 2012;
  • Defer 2012 expenses;
  • Estate Planning;
  • Gifting of Business Interests.
Each of these strategies must be evaluated on an individual basis both on a federal and state perspective. These strategies are provided as general knowledge and should not be considered a substitute for seeking the advice of your Accountant, CPA or Attorney.

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