As 2010 is coming to an end, year-end tax planning should be main concern of owners of  Pebble Beach homes . Gift giving is a simple, tax-efficient way to lessen one’s taxable estate. The total that a person may present to another person, without tax cost, is now $13,000. Gifting is an efficient approach to use in dropping estate tax liability. For instance, if a husband and wife each present $13,000 to their 3 children, the value of the couple’s estate is reduced by $78,000. Additionally, a lifetime unified credit gives an opportunity to keep away from gift taxes and make one or more gifts equivalent in value to $1,000,000 for all gifts. With the use of limited liability companies and limited partnerships, these gifts may be controlled to provide even greater cutback of your taxable estate.

Additionally, now is the time to consider gifting assets that are currently at oddly low values in the recent depressing economy. The rigorous decline in the stock and housing markets has shaped further built-in discounts for many assets. When the economy bounces back, these assets will start to boost in value, and that future appreciation will take place outside your estate.

Upper income and capital gains taxes are projected in 2011 and Congress may also adjust the tax laws to eradicate some favorable tax planning strategies. Therefore, it is sensible to engage in tax planning now, in order to have the profit of “grandfathering” present beneficial tax strategies before alterations in the tax law.

Steps that taxpayers including owners of Pebble Beach homes should think about now for effective tax minimization include:

1. Before loss of capital gains treatment and to avoid tax via Charitable Remainder Trusts and international tax planning strategies, sell appreciated property.

2. Before the government taxes 401(k)s, switch 401(k)s to Charitable Remainder Unitrust IRAs.

3. Owners of Pebble Beach homes should consider taking income in 2010, rather than putting off income to 2011 with its possible higher tax rates. As a result, clients may wish to postpone losses to 2011 to make up for expected 2011 income at higher tax rates.

4. Before the new tax raises, keep in income tax planning via tax-compliant plans that profit from favorable reciprocal tax treaties.

5. Think about Dynasty Trust which will allow the protection of assets for one’s direct and distant descendants, along with offering asset protection from creditors, with delay of the estate tax bite for many generations.

6. Think about Charitable Remainder Trust. One of the doubts facing taxation is how much will capital gains tax raise? A good way to avoid capital gains tax is to contribute appreciated assets, such as stock, family businesses and real estate to a Charitable Remainder Trust during 2010.

7. It is also likely to reduce the tax on appreciated assets by trading such assets for a foreign annuity policy. The exchange of assets for an annuity policy is neither taxable nor reportable until 2012. Additionally, capital gains within the annuity policy would not be taxable.

Recent changes, such as the present state of the economy, the election of a new Congress and new offshore reporting requirements, will make 2011 a crucial year for taxpayers including owners of Pebble Beach homes . More tax reviews and IRS inspection represent that, in addition to increasing taxes, the government is also more forcefully implementing tax laws, tightening or closing dodges and tailing tax evaders. The IRS is walking up its investigations of possible tax evasion and abuse, pursuing improper abusive transactions, and increasing audits and tax investigations. Owners of Pebble Beach homes should take a practical position to keep away from negative tax audits and higher taxes.

Posted: December 3, 2010