Category Archives: Uncategorized

In Tuesday night’s State of the Union Address, President Obama hinted at several changes in capital gains tax treatment, which proposals include eliminating the step-up in basis, requiring estates to pay capital gains on inherited appreciated assets, and raising capital gains tax rates. While the majority of Americans don’t see much income from capital gains, the wealthiest one percent may see about one-third of their income taxed as capital gains. (These are also the individuals most likely to face estate tax problems, with a current federal estate tax exemption amount of $5,430,000 per individual.)

The step-up in basis is a concept that comes in to play when someone dies owning appreciated assets. Generally, if I sell an appreciated asset today, the taxable capital gain is the difference between what I’m selling it for (present value) and its value when I acquired it (its “basis”). But if I die owning that same property, the basis for whoever inherits it is the value upon my death – thus, if the asset has appreciated, my heirs/beneficiaries get the “step-up” in basis. 

The outcome? A tax break, so to speak, for inherited appreciated assets such as real estate and securities. The President’s proposal would eliminate this break, and would also potentially make the owner’s death a taxable event unless the assets were left to a spouse or charity. Perhaps this increase would be in exchange for a repeal of the federal estate tax, as some pundits have suggested? Regardless, it will be very interesting to see how this all plays out! 

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I think it’s safe to say that I’m still working on juggling motherhood, client work, and extras like blogging, so I look forward to picking back up with new posts soon!

In the meantime, I’m sharing this link to a New York Times article that I saw the other day in an elder attorneys newsletter.

According to the article, the Treasury Department and the IRS are issuing new rules for hospitals who want tax-exempt status (about 60% of hospitals throughout the country), which intends to limit hospitals’ use of aggressive tactics to collect payments from low-income payments, presumably those without the means to pay.

Happy reading!

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Today, the Elder Law Update thanks all of our veterans for their service.

Thank you!

Several months ago, I saw a story about the 90+ Study on Sixty Minutes and found myself (not surprisingly) intrigued. Begun in 2003, the study has enrolled at least 1,600 elderly individuals in an effort to understand various aspects of aging, including the factors associated with longevity, the epidemiology of dementia, and the prevalence and prevention of disability and cognitive struggles. So far, findings have included:

• Those who drank moderate amounts of alcohol or coffee lived longer than those did not.
• Individuals overweight in their 70s tended to live longer than normal or underweight people did.
• More than 40% of people aged 90 and older suffer from dementia; nearly 80% of people aged 90 and older are disabled. Both dementia and disability were more common in women than men.
• In people with dementia who are older than ninety, about half don’t have sufficient neuropathology in the brain to explain the dementia.
• Among those aged 90 and older, people with a certain gene (called APOE2) are less likely to have Alzheimer’s dementia, but are still much more likely to have Alzheimer’s neuropathology in the brain.

Hopefully, this and other studies will lead to advancements in the diagnosis and treatment of age-related illness, cognitive decline, and other issues faced by the aging population.

Check out the full story here: The 90+ Study.

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Medicare Open Enrollment, which comes only once a year, begins October 15th and lasts through December 7th. During this period, Medicare beneficiaries should be evaluating whether their plans are working for them. If not, this is the opportunity to make some changes.

During Open Enrollment  you can:

• Change from a Medicare Advantage Plan to traditional Medicare (Parts A and B), or vice versa
• Enroll in (or change your current) Medicare Part D (prescription drug) plan
• Evaluate and change your current Medicare Advantage Plan

Individuals should be re-evaluating coverage and costs and under their current plan, including whether their doctors are still accepting the plan, whether their medications are still covered under the plan, and whether similar coverage is available at a lesser cost.

To make changes, you can go to WWW.MEDICARE.GOV or call 1-800-MEDICARE (1-800-633-4227). The “plan finder” section on Medicare.gov also includes information on Medicare Advantage Plan premiums and out-of-pocket expenses. Finally, the Medicare & You 2015 Pamphlet provides a great deal of information in an easy-to-read format.

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