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Taxation

Publicly Traded Securities

Publicly traded securities are stocks, bonds, and other securities that are traded on a public exchange, such as the New York Stock Exchange or NASDAQ.

Publication 1459

Publication 1459 is a book of federal tables used to compute retained life estate deductions. The edition that contains tables based on Table2000CM. It is available on the Web. The edition that contains tables based on Table 90CM is called Actuarial Values, Book Gimel. The edition that contains tables based on Table 80CNSMT is called Actuarial Values, Book Alpha.

Publication 1458

Publication 1458 is a book of federal tables used to compute charitable remainder unitrust deductions. The edition that contains tables based on Table2000CM is called Actuarial Values, Book 3B. It is available on the Web. The edition that contains tables based on Table 90CM is called Actuarial Values, Book Beta. The edition that contains tables based on Table 80CNSMT is called Actuarial Values, Book Alpha.

Publication 1457

Publication 1457 is a book of federal tables used to compute charitable remainder annuity trust and gift annuity deductions and pooled income fund deductions. The edition that contains tables based on Table2000CM is called Actuarial Values, Book 3A. It is available on the Web. The edition that contains tables based on Table 90CM is called Actuarial Values, Book Aleph. The edition that contains tables based on Table 80CNSMT is called Actuarial Values, Book Alpha.

Proposed Treasury Regulations

The Treasury Department publishes Treasury Regulations, which are the official interpretation of the IRS Code that is passed by Congress. Periodically, the Treasury Department publishes proposed regulations that suggest new interpretations or clarifications of the IRS Code. After public hearings, a comment period, and an indefinite drafting, the Treasury publishes final regulations that represent its final interpretation of the issues covered in the proposed regulations.

Private Letter Ruling (PLR)

A private letter ruling or PLR is an official ruling by the IRS on a specific tax question or set of questions that it has been asked by a specific taxpayer. Although a PLR is viewed by many practitioners as an indication of how the IRS views a tax question generally, a PLR may be relied upon only by the taxpayer who requested it. A taxpayer may not cite another taxpayer's PLR as precedent when arguing his or her own tax question with the IRS.

Personal Exemption

The personal exemption is the amount by which a taxpayer can reduce his or her taxable income that is based on the number of financial dependents the taxpayer has. Typically, a married person who files jointly with his spouse can declare a personal exemption for himself, his spouse, and any financially dependent children.

For example, the personal exemption amount is $4,000 per person in 2015. If a taxpayer declares four personal exemptions for 2015, the taxpayer's taxable income will be reduced by 4 x $4,000 or $16,000.

Ordinary Income Property

Ordinary income property is property that will be subject to ordinary income tax rates if sold by or distributed to a taxpayer.  A U.S. Savings bond, for example, is ordinary income property because when it matures, the difference in its face value and the amount the owner paid for it is subject to tax at ordinary income tax rates.

A charitable gift of ordinary income property is subject to deduction reduction rules.

Ordinary Income

Ordinary income is income that is subject to ordinary income tax rates.  Some of the most common sources of ordinary income include wages, dividends, interest, and retirement plan distributions.

The Jobs and Growth Tax Relief and Reconciliation Act of 2003 (JGTRRA) created a special sub-class of ordinary income called qualified dividends, which are taxed at a flat rate of 15%, regardless of the ordinary income tax bracket the taxpayer is in otherwise.

Net Investment Income Tax (Medicare surtax)

Donors with modified adjusted gross income (MAGI) above an applicable threshold pay a 3.8% surtax called the Net Investment Income Tax or NIIT. This surtax is imposed on the lesser of (1) net investment income or (2) the amount by which modified adjusted gross income (MAGI) exceeds the applicable threshold. It is imposed on top of the taxpayer’s regular income tax. The tax took effect on January 1, 2013.

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