Newsletter NJ Laws by Kenneth Vercammen, Esq.: E677 VercammenLaw News

E677 VercammenLaw News

1. Have a Power of Attorney prepared for your college children and children traveling out of state

2. Typically no Capital gains tax on death since there is a step up in basis

3. August outdoor Music Ken V hopes to attend

1. Have a Power of Attorney prepared for your college children and children traveling out of state

There are many good reasons to consider getting a Power of Attorney and Medical Directive for your adult “child”. A prominent Monmouth County Law office wrote while you made certain decision for your child before he or she turned 18, you have no authority to take action now. In the event your child becomes ill or has a serious accident while they are away, you do not have legal right to withhold Power of Attorney, it is important to have a plan in place to deal with their health, financial, educational and legal needs.

Durable Power of Attorney to handle finances will enable you to take care of tasks for your child. This includes: registering their car; communicating with their college about issues which fall under HIPAA, like grades and disciplinary actions; completing financial transactions at their bank, their college, etc. If your child runs in to an issue with their passport while they are overseas, you can be assured that you have the authority to help.

Living Will or Health Care Directive is important in the event of an accident or illness. You will be able to talk to medical staff and make decisions on your child’s behalf, if necessary.

While you may never need to use these documents, it is better to be safe than sorry!

2.Typically no Capital gains tax on death since there is a step up in basis

In most cases, the basis of property acquired from a decedent is its fair market value on the decedent's date of death. This is often referred to as stepped-up basis because the fair market value of property held by a decedent at death frequently is greater than the decedent's basis in the property.

These capital gains taxes are then calculated using what's known as a stepped-up cost basis. This means that you pay taxes only on appreciation that occurs after you inherit the property.

TAX EXPENDITURE FOR EXCLUSION OF CAPITAL GAINS AT DEATH

Under the baseline tax system used by Treasury’s Office of Tax Analysis (OTA) to determine tax expenditures, unrealized capital gains would be taxed when assets are transferred at death. A decedent’s final income tax return would include unrealized capital gains from all assets held at death.

Under current law, however, unrealized capital gains on assets held at the owner’s death are not subject to income tax. In addition, the cost basis of the decedent’s assets transferred to beneficiaries is assigned the fair market value (FMV) of the assets at the owner’s date of death, not the basis of the decedent. This step up in basis removes unrealized capital gains on assets held until death from the base of the income tax. Exempting unrealized capital gains on assets held at death is a tax expenditure. Source

https://home.treasury.gov/system/files/131/Step-Up-Basis-2014.pdf

3. August outdoor Music Ken V hopes to attend

8/18 Friday Edison Elks Madison Ave Band

https://www.facebook.com/events/1257133728266263/?acontext=%7B%22event_action_history%22%3A[]%7D

or Bar A- Guns 4 hire

GUNS FOR HIRE

Aug 18 @ 6:00 PM – 9:30 PM

8/21 D’Jais Belmar- Holme band older ladies

Aug. 22: Beatlemania Again, The Beatles tribute

at Woodbridge High School Please share with friends

Ken V will bring philly pretzels

August 22nd, 2023 7:30PM