The new Tax Bill did not directly make any changes to IRAs and other retirement plans, but it indirectly creates more incentives to save for retirement and to convert traditional IRAs to Roth IRAs.

The difference in the OBBBA limit on tips and overtime compensation for single individuals, but not married individuals, may be unintentional, considering the fact the phase-in limit language is identical for these two OBBBA deductions. The House version of the OBBBA bill did not include any limit at all, so that language was added (someone has reported, in secret) in the Senate’s version of the bill. Was this difference intended by the Senate, or the House, or anybody who took the time to read the bill before voting on it? This marriage penalty -or- marriage bonus interpretation is probably just a small glitch that can be clarified in the Proposed Regulations.

Most folks who will qualify to claim this new auto loan interest deduction will probably not have $10,000 of interest expense a year. Also, the phaseout level starts at low amounts for individuals who are likely to be able to afford a new car. And as mentioned, given the price differential between new and used cars, the tax-savings of deducting loan interest will probably not be enough to justify purchasing a new car just to claim the interest deduction.

With new estate planning strategies seemingly appearing each month, a settlor should be able to choose the governing law for any aspect of his/her trust. Hopefully, with a new, model conflicts-of-law act and Restatement on the horizon a more streamlined approach will exist to reduce future conflict-of-law situations when dealing with trusts.

At a time when the government seems to be backing away from financing social welfare programs, more individuals will be looking to local charities for help. It is not clear if charities will also suffer from these new charitable deduction rules if a donor has less incentive to engage in charitable giving.

when determining the benefits of a Roth conversion, now must be factored in the impact of the new senior deduction and the increase in the SALT deduction, or more accurately the impact of their phaseout rules. These deductions enhance the opportunity of a Roth conversion, but their phaseouts may put at risk larger Roth conversions for high earners.

While income taxes at the federal level might be less onerous over the next decade, the states will have to step forward and fill the ‘revenue void’ with increased state income rates to address the larger revenue burdens they will face going forward as the federal government steps back.

Exchanging assets of equivalent value with a grantor trust is a great way to obtain a step-up in income tax basis after the grantor’s exercise of the retained power. That said, the exercise of that power of substitution may run squarely into the trustee’s fiduciary duty to protect trust assets for the benefit of the trust beneficiaries.

We often learn the most from the mistake made by others. The very aggressive planning done in Fields within a few weeks of Ms. Fields’ death to claim very large valuation discounts using a limited partnership ‘wrapper’ is a good reminder that all too often creating valuation discounts on paper, is usually ‘too good to be true.’ When you consider that this type of aggressive estate planning, often motivated by greed of the heirs, can lead to a 20% penalty in addition to the higher federal estate tax liability, think twice before going ‘hog wild.’

The IRS’s assertion of the step-transaction doctrine is a tax trap that can be planned for, and around, with forethought and attention to details. When thinking about any transfer tax strategy that uses a lifetime gift, whether it is to a SLAT or any other transfer to an irrevocable trust, the potential assertion of the step-transaction doctrine always needs to be in the back of the mind of the planner and his/her clients. It can be avoided with advance planning, yet it is more apt to occur if there is haste in putting the plan in place. Time and following formalities are the best protection from the step-transaction doctrine.