Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
This represents a 2 cent increase for business miles, and 1 cent decrease for medical/moving. Doesn't make sense to me to have a decrease, given gas prices!
I often prepare Living Trusts for clients, who like the idea of avoiding the cost, time, and hassle of probate. However, probate can only be avoided completely if there are no probate assets. One type of asset that is often overlooked is vehicles. If someone dies with only a $15,000 vehicle in his or her name, probate will often be required in order to transfer title.
In the past clients have told me that when they have tried to transfer their cars to a living trust, the Division of Motor Vehicles requires them to pay the 3% highway use tax upon transfer in addition to the new title fee.
However, under North Carolina law, there should be maximum of only $40 due. Thus, assuming you can get the folks at the local DMV office to agree, the cost of transferring a vehicle to a trust should be fairly reasonable, and certainly less than the cost of probate.
N.C. General Statutes Section 105-187.6 provides, in pertinent part (emphasis added):
(b) Partial Exemptions. – A maximum tax of forty dollars ($40.00) applies when a certificate of title is issued as the result of a transfer of a motor vehicle:
(2) To a partnership, limited liability company, corporation, trust, or other person where no gain or loss arises on the transfer of the motor vehicle under section 351 or section 721 of the Code, or because the transfer is treated under the Code as being to an entity that is not a separate entity from its owner or whose separate existence is otherwise disregarded, or to a partnership, limited liability company, or corporation by merger, conversion, or consolidation in accordance with applicable law.
I previously blogged about the 2007 income tax deduction available to North Carolina residents to contribute to a North Carolina 529 College Savings Plan account. A deduction of up to $2,500 is available for single taxpayers and up to $5,000 for married couples filing jointly. Initially the deductions were subject to income limitations, but no longer.
In addition, rollovers from 529 plans in other states are considered contributions, so those taxpayers (like me) who set up accounts in another state years ago when the NC Plan was lousy, can now do a rollover to the NC Plan and take a deduction, even without making any new contributions. Rollovers are allowed only once every 12 months.
A veto would also kill the extension of the $100,000 IRA Charitable Rollover, which is scheduled to expire at the end of this year. Tax expert Professor Christopher Hoyt of the University of Missouri (Kansas City) Law School is betting there will be no veto. The following was released by Tax Analysts:
The White House November 8 threatened to veto the House's alternative
minimum tax patch and extenders package.
According to a statement of administration policy, the Bush
administration opposes the Temporary Tax Relief Act of 2007 (H.R. 3996)
because it couples an AMT patch with what it called "a tax increase on
other taxpayers."
The measure would provide a one-year patch of the AMT at a cost of
roughly $ 50 billion in 2008 and extend for one year several popular tax
breaks, including the research credit and the deduction for teachers'
classroom expenses, at a total cost of roughly $ 21 billion over 10
years, according to a Joint Committee on Taxation revenue estimate. Two
of the bill's largest offsets include provisions that would tax
nonqualified deferred compensation paid by offshore hedge funds to
investment managers and tax as ordinary income the carried interest
income of private equity partners performing investment management
services. A third large offset would implement an eight-year delay in
allowing worldwide allocation of interest expense.
The administration highlighted its opposition to tax provisions that it
warned would "undermine the competitiveness of U.S. businesses in the
global economy." The administration cautioned that lawmakers should
remove those tax provisions before passing the final bill.
The White House also said it disapproved of a provision in the bill that
would eliminate the IRS private debt collection program.
The House is expected to take up the bill November 9, but House Speaker
Nancy Pelosi, D-Calif., indicated November 8 that due to scheduling of
other bills, a vote on the package could slip into the following week,
since its timing was "not absolutely certain."
Another increase in North Carolina court fees: As of August 1, 2007, testamentary trusts (those contained in a Will) which account to the clerk are subject a fee of 40 cents per $100 of receipts. That fee is entirely separate from the probate fee paid by the estate. Thus, if a Will creates 8 testamentary trusts (all of which are required to account to the clerk), each of those testamentary trusts is subject to a probate fee of up to $6,000. Apparently, this change in the law applies to all testamentary trusts, including those that have been accounting to the clerk's office for years and have been paying only a $20 annual filing fee.
To avoid this fee, the Will must provide that the Trustee of the trust is not required to file accountings with the clerk.
Fees for probate have been increasing steadily over the last few years. All the more reason to use a living trust!
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