EPSTEIN
page 6 / 405 . OCR, unverified
& Wealth Strategies
Wilmington Trust, N.A.
New York, NY 10022
(P)
I (9
www.wilmingtontrust.com
ABOUT WILMINGTON TRUST
Wilmington Trust's Wealth Advisory offers a comprehensive array of personal trust, financial planning, fiduciary, asset
management, and family office services that help high-net-worth individuals and families grow, preserve, and transfer wealth.
Wilmington Trust has offices throughout the United States and internationally in London, Luxembourg, Frankfurt, Dublin,
Amsterdam, Cayman Islands, and Channel Islands. Wilmington Trust focuses on serving families with whom it can build long-term
relationships, many of which span multiple generations. Wilmington Trust also provides Institutional Client Services for clients
throughout the world. Wilmington Trust is an M&T company. For more information, visit www.WilmingtonTrust.com.
Copyright @ 2013. All rights reserved.
IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, please be advised that any tax advice
contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the
purpose of (I) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party
any transaction or matter addressed herein.
This material is for informational purposes only and is not designed or intended to provide financial, tax, legal, accounting, or other
professional advice since such advice always requires consideration of individual circumstances; nor does it represent any
undertaking to keep recipients advised of all relevant legal and regulatory developments. If professional advice is needed, the
services of a professional advisor should be sought. The application and impact of relevant laws will vary from jurisdiction to
jurisdiction and should be based on information from professional advisors. Information and opinions presented have been
obtained or derived from sources believed to be reliable. No representation is made as to their accuracy or completeness. All
opinions expressed herein are as of the date of this presentation and are subject to change.
EFTA00636635
--- PAGE 3 ---
From: Klein, Sharon
Sent: Tuesday, November 19, 2013 10:50 AM
To: Klein, Sharon
Subject: Proposal to reinstate New York's gift tax, increase the estate tax threshold and dose the resident trust "loophole"
Hi,
I thought you would be interested to know that the New York State Tax Reform and Fairness Commission, a
body established by Governor Cuomo in December 2012 to conduct a comprehensive and objective review of
the State's tax structure, has just issued its final report. The Commission was charged with developing revenue
neutral policy options to modernize the current tax system with the goals of increasing its simplicity, fairness,
economic competitiveness and affordability.
Among the Commission's findings with respect to estate and gift tax are the following:
•
New York's estate tax, currently based on federal law as it existed in 1998, is outdated.
•
The current exemption threshold of $1 million has been criticized as too low given significant
increases in the value of assets. In addition, there are concerns that it may serve as a factor in
taxpayer migration from New York to other states (e.g. Florida) that do not impose any estate tax.
•
Under the new federal scheme, gift giving has increased substantially, which will result in
smaller estates and an erosion of the State's estate tax revenue.
The Commission makes the following recommendations:
Reform the Estate Tax and Raise the Estate Tax Exemption to $3 Million:
The Commission recommends raising the threshold from $1 million to $3 million, thereby eliminating almost
three-quarters of all estates from estate tax. The exemption for estates valued in excess of $3 million would be
phased out gradually to prevent any steep jumps in marginal tax rates.
Eliminate the Generation-Skipping Tax (GST):
New York's GST was enacted in 1999 but is not a major source of revenue. On average, fewer than 50 GST tax
returns are filed and the tax generates less than $500,000 annually.
Reinstate the Gift Tax:
New York repealed its gift tax in 2000. According to the Commission, as New York no longer has a gift tax, the
increase in gifting driven by the $5.25 million federal gift tax exemption will result in a reduction in the size of
New York taxable estates, with a corresponding loss of estate tax revenue.
The Commission proposes two options to address the impact of the federal change on New York estate tax
revenues:
•
Under the preferred option, New York could reinstate a gift tax, which would subject gifts above a
certain threshold to tax rates in line with the New York estate tax.
•
Alternatively, New York could require estates to add back the value of any gifts above a certain
threshold before determining the value of an estate.
Either option is stated to have the potential to generate revenue of approximately $150 million annually.