Amazon Changes Tune on Internet Sales Tax: Robert Wood Fox Business

Buffet Rule, AMT And Other Tax Questions: Tax Lawyer Robert Wood San Francisco California

The Tax Lawyer Robert Wood...Wood LLP in San Francisco

Warren Buffett likes talking tax and knows a lot about becoming wealthy.  But many are wondering if he should stay in Omaha, perhaps even take up peddling mail-order steaks.  His Buffett Rule may be attractive to President Obama and to low income earners who've never heard of the alternative minimum tax—otherwise known as AMT.  Tax me more is also a nice sound bite.

But even if a tax increase is a good idea, many others are wondering whether the Buffett Rule is a good way to do it.

Read more at Forbes.com

With Trusts, "Crummey" Is Good: San Francisco Tax Lawyer Robert Wood

(Forbes) We don’t like to contemplate our own deaths. But slightly less objectionable are current strategies to reduce exposure to gift tax, get assets in loved ones’ hands, and protect against estate taxes. If your estate is less than $5 million (or $10 million with your spouse) you may think you no longer need to worry about any of this. But we don’t know if that will remain so.

The estate tax could come back with a vengeance in 2013. A “Crummey” trust takes its name from a famous tax case involving Reverend Crummey, who was probably teased mercilessly growing up. See Crummey v. Commissioner. To follow in his footsteps, set up a trust and have it buy a life insurance policy on your life. Someday when you die, the trust will receive the insurance proceeds and pay them out to the beneficiaries listed in your trust.

To pay the annual premiums on the policy, you can put in up to $13,000 per person for your family members. Since you are essentially buying a policy that benefits your family, those premium payments would normally be considered gifts to your beneficiaries. However, done properly, you pay no gift tax on those payments, and when you die the trust will receive the policy proceeds free of estate tax.  Read more

Cain's 999 Mutiny: San Francisco Tax Lawyer Robert Wood

It is highly unlikely that --a candidate who admits he’s never held office---will make the Oval his first.  But whichever side of the soapbox (or pizza box) you favor, it’s hard not to like him.  Many discount Herman Cain, but don’t invert into the .

When Cain intones that our tax code has become “ ," what tax lawyer can argue with hisimage via eewmagazine fervent imagery yet plainspoken truth?  Mr. Cain may be guilty of hyperbole, but you have to admit our tax system has spun out of control.  It’s like a pizza on a centrifuge, with all the sauce and toppings spinning off to smack against the walls.  It makes an interesting (if edible) Jackson Pollock, but it’s still a mess.

Some have questioned the provenance of Cain’s , which proposes replacing our current bellicose, bloated idiot of a tax system with a 9% corporate tax, a 9% personal income tax and a 9% national sales tax.  He argues that this simple plan would revive the economy and promote growth.  Some project it would collect as much revenue as our current system, and that its simple ingredients would be easy for everyone to swallow.  Like tomatoes, cheese and dough.

http://www.forbes.com/sites/robertwood/2011/10/13/in-taxes-is-cain-able/

How much do the rich really pay in taxes? San Francisco tax lawyer Robert Wood

President Barack Obama has said it's time for the wealthy to pay their fair share of taxes.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said Monday. "That's pretty straightforward. It's hard to argue against that."

The data tell a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

The reality is that much of the income wealthy Americans receive typically comes from capital gains which is taxed at 15% at the moment.

In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income. Capital gains are generally taxed at a preferential rate in comparison to ordinary income (26 U.S.C. §1(h)). This is intended to provide incentives for investors to make capital investments, to fund entrepreneurial activity, and to compensate for the effect of inflation and the corporate income tax. The amount an investor is taxed depends on both his or her tax bracket, and the amount of time the investment was held before being sold. Short-term capital gains are taxed at the investor's ordinary income tax rate, and are defined as investments held for a year or less before being sold. Long-term capital gains, which apply to assets held for more than one year, are taxed at a lower rate than short-term gains. In 2003, this rate was reduced to 15%, and to 5% for individuals in the lowest two income tax brackets. The reduced 15% tax rate on qualified dividends and long term capital gains, previously scheduled to expire in 2008, was extended through 2010 as a result of the Tax Reconciliation Act signed into law by President George W. Bush on May 17, 2006. This was extended through 2012 in legislation passed by Congress and signed by President Barack Obama on Dec 17, 2010. As a result:

• In 2008–2012, the tax rate on qualified dividends and long term capital gains is 0% for those in the 10% and 15% income tax brackets.
• After 2012, dividends will be taxed at the taxpayer's ordinary income tax rate, regardless of his or her tax bracket.
• After 2012, the long-term capital gains tax rate will be 20% (10% for taxpayers in the 15% tax bracket).
• After 2012, the qualified five-year 18% capital gains rate (8% for taxpayers in the 15% tax bracket) will be reinstated.