ACC 553 Jason Bourne-Breaux Tax Memo

ACC 553 Jason Bourne-Breaux Tax Memo - withdrawn later...

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Memorandum To: Jason Bourne-Breaux, Managing Director for Taxation From: Anthony Gilbert, CPA A   401k   (for private sector employees) or a   403b   (for many public sector employees)  allows a worker to make contributions via payroll deductions which are exempt from  federal income tax; income tax is paid in retirement when distributions are taken. This is  favorable for most individuals because retirees tend to be in lower tax brackets once they  retire. These tax-sheltered vehicles can result in maximized returns and tax avoidance  when catch-up clauses and employer contributions are fully taken advantage of. Individuals can reduce capital gains taxes by taking advantage of  Roth IRA s. With this  vehicle,   tax   dollars   are   contributed   after-tax   but   are   allowed   to   appreciate   and   be 
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Unformatted text preview: withdrawn later, tax-free. A more sophisticated method for minimizing capital gains taxes is a charitable trust , in which a grantor arranges for income payments to be made to an individual from the trust until a given date, at which point the assets in the trust are transferred to a qualified charity. Such trusts are generally tax-exempt. Though the estate tax exemption has grown much more liberal in recent years, individuals still may find themselves in a position of liability, particularly after 2010. In such cases, an Intentional Grantor Trust may be used. Initial assets placed in the trust are treated as tax-exempt gifts....
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This note was uploaded on 03/29/2012 for the course ACC 553 taught by Professor Gilbert during the Spring '12 term at DeVry Houston.

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