ShuffieldLowman News



	Recent ShuffieldLowman News

	Jennifer Junker presented a talk at a gathering held at SunTrust on the topic, "Administration Issues, Retirement Benefits and Litigation Issues" to a large group of financial planners. She also spoke on the topic, Fiduciary Relationships and ERISA" at RSM McGradrey in November.



	Tae Shin, Jason Davis and Kellie Symons presented a seminar held at Colonial Bank for small business owners entitled, "From the Inception to Succession: The Journey of a Small Business Owner." Tae Shin and Jason Davis also spoke on the topic, "Mergers & Acquisitions" at the Florida Federal Tax Seminar sponsored by the Florida Institute of CPAs (FICPA) in November.





	The attorneys and staff of ShuffieldLowman are participating in Habitat for Humanity Orlando home building on an on-going basis, recently and currently completing multiple projects in November and December.

	Bill Lowman participated in a panel discussion with the High Technology Incubator at UCF in September speaking on the topic, "Government Contracts." The program drew an audience of people who do (or plan to do) business with the government. Discussion included decisions on corporate legal entities, non-compete clauses, intellectual property, executive compensation, buy/sell agreements and other topics which provided a base for questions for the attendees from the legal and CPA professions and the business community. Bill also recently joined the Association for Corporate Growth (ACG), Orlando Chapter which was formed for the purpose of educating growing businesses in the Central Florida market and facilitating relationship-building between these companies, capital sources and professionals active in corporate finance.



	Heidi Isenhart is the current president of the Rotary Club of Orlando. She is the second female to serve as president in the club's history.



	Suzanne Meehle was invited to speak on the topic "Legal Liability and Data Retention" to KForce Professional Staffing in Ybor City for a January presentation, She also spoke in October on the topic, "Legal Liability and Planning for E-Discovery" to over 200 Central Florida Structured Query Language (SQL) server software and database professionals who gathered in Central Florida. This one-day training, called "SQL Saturday" was presented by the Orlando Professional Association for SQL. In addition, Suzanne served on the Central Florida fundraising committee for the August Victim Serve Center's annual fundraiser, with proceeds going to the Sexual Assault Treatment Center for victims in Orange County. She also co-chaired the ShuffieldLowman- sponsored Central Florida Association for Women Lawyers 2008-2009 New Members Reception in September.



	Kellie Symons serves on the planning committee for the Professional Women's Exchange, a Central Florida Association for Women Lawyers (CFWAL) sponsored event which will bring together hundreds of professional women from across the community in a February 5, 2009 event.



	Eric Werrenrath recently joined the Home Builders Association of Metro Orlando Developers' Council.



	ShuffieldLowman sponsored the Jewish National Fund Tree of Life Dinner November 12 at Rosen convention trio property, the Rosen Plaza Hotel where the community recognized the leadership of honorees Bruce K. Gould and R. Van Bogan as its 2008 Tree of Life award recipients. ShuffieldLowman also sponsored the Junior Achievement Hall of Fame Dinner November 20 at Rosen trio property, the Rosen Centre Hotel. The 2008 JA Honorees were: NASCAR'S William C. France, honored posthumously, CED Companies' Alan H. Ginsburg, Harvey L. Massey of Massey Services, Inc. and Dr. John Hitt of University of Central Florida.

As the end of the year approaches, most of us are concerned with maximizing our use of credits and deductions and minimizing taxes. We’ve put together a list of tax tips and planning recommendations to try to help you make the most of your planning opportunities.

Gift and Estate Tax Planning

Although the economic news has been anything but good, this is actually an excellent time to engage in estate and gift tax planning due to lower values and lower interest rates.

· Annual Exclusion Gifting: Making gifts of amounts equal to your annual exclusion is one of the simplest ways to do effective gift and estate planning. The government permits every person to transfer up to $12,000 this year to as many recipients as desired. Over time, these simple transfers can add up to big gifts to family and friends which do not impact your estate or gift exemption amount. For example, a married couple could give each of their children, children’s spouses and grandchildren $24,000 this year without any impact on their exemption and no filing requirement of a gift tax return. In 2009, the annual exclusion is scheduled to increase to $13,000 per person.

	· Gifts made by check should actually be cashed prior to year so that the gift qualifies as an annual exclusion gift for this year.

	· Annual exclusion giving using discounted assets, such as interests in family partnerships or limited liability companies, is an additional way to make gifts and also provides you with more “bang for your buck”.

· Loans in a Low Interest Rate Climate: Loans between family members have to be made at an interest rate of at least the Section 7872 rate in order for the “foregone” interest not to be counted as a gift. Right now, the Section 7872 rate varies between 1.3% for short term loans to 4.4% for long term loans. The mid-term rate of 2.83% presents an excellent opportunity to move wealth down a generation without using any gift or estate tax exemption.

· Grantor Retained Annuity Trust (“GRAT”): With a short term 7520 rate of just 1.3%, a GRAT is another way to move assets to younger generations with little to no use of estate or gift tax exemption. A GRAT provides for an annuity to be retained by the older family member with the younger generation receiving the “remainder” interest after the annuity interest ends. As the gift to the younger generation is made at the time the trust is created, once the annuity ends, the property will pass without any further imposition of gift or estate tax. Additionally, the only gift that counts against your exemption is the value of the remainder interest, and it is possible to structure a GRAT to zero this out. With lower interest rates, the annuity payments necessary to achieve this result are lower leaving more to pass to your beneficiaries at the end of the term. The value of the GRAT is includable in your estate if you die within the term, but your estate be no worse off than if you hadn’t done the GRAT to begin with.

· Change in Estate and Generation-Skipping Transfer Tax Exemption: The exemption is slated to increase to $3.5 million per person next year, be repealed in 2010 and return to $1 million per person in 2011. It is anticipated that the exemption will be set at $3.5 million next year with that exemption retained for future years. No changes are expected with respect to the $1 million gift tax exemption.

Charitable Giving

As the end of the year approaches, you should take a minute to review your charitable giving. Charitable gifts made before the end of the year can provide you with a substantial income tax deduction while also benefiting the charity of your choice.

	· Gift of Cash: A contribution of cash is not only a simple way of giving, but can also be deducted by you on your income tax return at fair market value. Deductions can be taken for up to fifty percent of your gross income, or up to thirty percent if the charity you give to is a private foundation. If you can’t use your entire deduction for the year, you can carry it forward for the following five years!

	· Gift of Stock: Appreciated publicly traded stock that has been held for at least one year can be a very tax effective means of giving. Not only will you not have to recognize any of the long term capital gain, you will receive a full fair market value deduction for the stock if transferred to a public charity. Deductions for this type of gift can be taken for up to thirty percent of your gross income if the gift is to a public charity or twenty percent if the gift is to a private foundation.

	· Transfer of your IRA: Congress recently restored the tax code provision permitting a transfer directly from your IRA to a public charity. If you are age 70 1⁄2 or older, you can transfer up to $100,000 a year with no recognition of income tax. The transfer will also count toward your required minimum distribution for the year. However, no charitable income tax deduction is available for this gift.

	· Gift of Life Insurance: Yet another way to benefit your favorite public charity is to transfer the ownership of unnecessary insurance policies to the charity. These policies can either be paid-up or policies for which future premiums are due. The initial gift of the policy will provide you with an immediate income tax deduction for amount the lesser of your basis in the policy and the policy value. Further, if future premiums are paid by you, the payment of these premiums would also provide you with an additional income tax deduction.

Income Tax Planning

At the end of the year, most of us want to make certain we are making the most of all available credits and deductions to mitigate income tax owed for the year. With the change in administration, it is likely that we will see some significant tax changes in the next few years.

	· Capital Gains Rates: Capital gains rates may be increased in 2009 or 2010 to 20% for high income taxpayers. If you are considering selling and anticipate large capital gains, it may be prudent to make the sale sooner rather than later. Charitable planning in conjunction with planning for a sale can make the tax bite less onerous.

	· HSA Contributions: If you become eligible to make Health Savings Account contributions as late as December of this year, you can make a full year’s worth of tax deductible-contributions in 2008.

	· Boost Your Deductions: Consider making your January 2009 mortgage payment in 2008 or prepaying your property tax bill.

	· Remember the Sales Tax Deduction: For 2008 you can choose whether to deduct state income tax or state sales tax on your federal income tax return. As Florida has no personal income tax, deducting your sales tax is an easy decision. Not sure where all of your receipts are? The IRS’ website has a tool that can be used to estimate your sales tax, and the number calculated can be used on your return.

	· Be Aware of the Alternative Minimum Tax (AMT): If you’re subject to the AMT, deductions are limited. If you’re not sure if you are subject to the AMT, you should consult with your tax advisor before taking steps to maximize deductions that you won’t be able to use.

Other Tax Changes to Note

Although these aren’t necessarily important for year end planning, these changes to the law could impact you or your company.

· Company Owned Insurance: If you own a business and obtain insurance on an employee which is owned by the business, you must now receive a waiver or consent from the employee before the policy is issued or proceeds received by the business will be considered taxable income. Additionally, an informational return is required to be filed with the IRS for each year the insurance is owned.

We hope that these tax tips and notes are helpful to you as you wind up your tax planning this year. Our firm wishes you the best this holiday season.