More On Tax Planningfrom The Advisor's Professional Library
- Annuities: Estate Tax The value of certain types of annuities may be included in an estate’s value. Understanding the intricacies of these inclusions is a critically important aspect of estate planning.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
Capital gains fell while losses more than doubled from 2007 to 2009, according to the IRS' latest Statistics of Income Bulletin.
The SOI Bulletin, which comes out quarterly, reported that from tax years 2007 to '09, capital gains declined by 55.7%, to $491 billion from $1.1 trillion. During this same period, capital losses rose to $454 billion from $193 billion, an increase of 135.2%. In terms of capital gains less losses, net gains fell by more than 90%, from $914 billion in 2007 to $37 billion in 2009.
For tax year 2010, taxpayers filed some 4.3 million returns with adjusted gross income of $200,000 or more, and roughly the same number reported expanded income of $200,000 or more, according to the bulletin.
Expanded income is AGI plus tax-exempt interest, nontaxable Social Security benefits, foreign-earned income exclusion and items of “tax preference” for “alternative minimum tax” purposes, minus several kinds of expenses and miscellaneous itemized deductions not subject to the 2%-of-AGI floor.
These high-income returns represented about 3% of all returns filed for the 2010 tax year, up from 2.8% in 2009.
In addition, the municipal bond market was still dominated by almost 22,000 tax-exempt governmental bonds issued in 2010, the report said. These raised $294 billion in proceeds for public projects, such as utilities, schools and transportation infrastructure.
Executors for estates of nonresident aliens filed 1,887 tax returns in the years 2009 to 2011, mainly for estates of decedents who died between 2007 and 2010. Data from these returns showed an overall decline in the total gross estate and net estate tax owed, the SOI reported.
Read More U.S. Taxpayers Filed Returns in 2011 as Pay Rose on AdvisorOne.