Michael Gray, CPA's Tax and Business Insight

October 12, 2016

© 2016 by Michael C. Gray

ISSN 1539-395X

A monthly report to help you prepare for your financial future, keep more of what you earn by minimizing your taxes, and build an extraordinary business!

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(If you find this information valuable, please pass it on to a friend!)

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Minerva Siemer playing in autumn leaves.

Happy Halloween!

Boo! The year will soon be over.

Halloween falls on a Monday this year. Please be extra careful if you are driving home from work in the early evening.

For many children in the United States, Halloween rivals Christmas as a favorite holiday. Many adults also "get into the spirit" and love to decorate and maybe even dress in a costume and/or make up for the holiday.

When Janet and I visited Europe, it was striking that Halloween wasn't widely celebrated there.

Enjoy the season!

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Family celebrations.

My wife, Janet Gray, is celebrating her 65th birthday this month. She is a blessing for our family and especially for me. Happy birthday, Janet!

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Extended due date for individual income tax returns will soon be here.

We are in the midst of a second tax season. The extended due date for 2015 individual income tax returns is Monday, October 17. We won't be accepting appointments for new clients until after October 17.

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James Gray "kickstarts" new version of Crazier Eights.

James Gray, who is my son, has created a marvelous family card game, called Crazier Eights. He invented it because family members like my wife, Janet, and me were too intimidated to play Magic The Gathering with him. The basic concept of the game is similar to crazy eights or Uno, and the cards have special abilities and are decorated with terrific artwork. These days it seems everyone is walking around with their noses in their smart phones. Crazier Eights is a game with some social interaction.

Now James is introducing a new Camelot edition of Crazier Eights, and has initiated a Kickstarter to finance his startup costs. As a contributer to the kickstarter, you can get a copy of the game and other bonuses. Here is a link for the Kickstarter web site - tinyurl.com/craziercamelot. I hope you'll visit the site to learn more.

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Good news! QTIP election is accepted with a portability election.

In the past, the IRS has said a QTIP (qualified terminable interest property) election wasn't effective unless making the election resulted in a lower federal estate tax. After that announcement, Congress enacted a portability election to enable a surviving spouse to receive the unused lifetime estate and gift tax exemption of a deceased spouse.

When a QTIP election is made for a qualified trust, the trust property qualifies for the estate and tax marital exemption and the trust property is included in the taxable estate of the surviving spouse. That also means the tax basis of the property in the QTIP trust receives a new tax basis (cost to determine gains and losses for income tax reporting) at the death of the surviving spouse.

Now the IRS has announced the QTIP election can be made when there is no tax reduction as a result of a portability election. A QTIP election will only be voided if an executor request that it be voided.

This is complex stuff, but worth discussing with your attorney whether your estate plan should be updated.

(Revenue Procedure 2016-49.)

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Does your group need a speaker?

We are seeking opportunities to speak before groups. Topics include recent tax developments, tax issues relating to real estate, how estate planning has changed recently, tax issues relating to alternative investments using retirement accounts, and marketing topics such as "How I created a public access television show broadcast on eleven Bay Area stations." To make arrangements, call Michael Gray at 408-918-3161.

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Please share your good experiences with Michael Gray, CPA.

As you know, more and more people are going to the internet to find information about service providers. We hope you will share some good words about experiences that you have had with our firm<. Some of the sites where you can share your experiences include yelp.com and siliconvalley.citysearch.com.

We use Angie's List to assess whether we're doing a good job keeping valued customers like you happy. Please visitAngiesList.com/Review/4258970 in order to grade our quality of work and customer service.

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Financial Insider Weekly broadcast schedule for September and October.

Financial Insider Weekly is broadcast in San Jose and Campbell on Fridays at 9:30 p.m., Pacific Time. You can watch it on Comcast channel 15 for San Jose and Campbell. The show is broadcast as streaming video at the same time at www.creatvsj.org.

Here are the scheduled interviews for September and October:

October 14, Bill Neville, Certified IRA Services Professional, The Entrust Group, "Making alternative investments in your IRA or Roth account"
October 21 and 28, Nancy Ross, Bauer Shepherd & Ross and Associates, "How a collaborative approach can make a divorce a less painful process"
November 4, Robert E. Temmerman, Jr., Esq., Temmerman, Cilley & Kohlmann, LLP, "I'm an executor! Now what?"
November 11, Robert E. Temmerman, Jr., Esq., Temmerman, Cilley & Kohlmann, LLP, "I'm a trustee! Now what?"
November 18 and 25, Rebecca Dupras, Esq., Silicon Valley Community Foundation, "Why and how to promote charitable giving in your family"

Financial Insider Weekly is also broadcast as follows:

Past episodes of Financial Insider Weekly are posted on YouTube. One way to watch them is to go to our web site, www.financialinsiderweekly.com, and click on "Past Episodes."

Let me know any ideas that you have for topics or guests. Guests will usually have to be located in or near the Silicon Valley in California.

Hope you can watch or record the show. Please tell your friends about it!

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Michael Gray regrets he can no longer personally answer email questions. He will answer selected questions in this newsletter.

For your questions about dependent exemptions, see IRS Publication 501 at www.irs.gov.

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Visit our new article!

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Follow me on Social Media!

Want to see new episodes of Financial Insider Weekly as soon as they're posted on Youtube? Want to see Michael Gray's blog posts as soon as they're live? We post them (and more) on social media!

If you enjoy Twitter, please follow me at www.twitter.com/michaelgraycpa. I would especially appreciate retweets of our messages announcing episodes of Financial Insider Weekly.

I'm also on Facebook, LinkedIn, and Google+.

you can also follow me on other social media sites, Facebook, LinkedIn, and Google+.

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If you have employee stock options, have you subscribed to Michael Gray, CPA's Option Alert at no charge or obligation?

To learn more, visit stockoptionadvisors.com/subscribe.shtml

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Real estate investors, have you subscribed to Michael Gray, CPA’s Real Estate Tax Letter at no charge or obligation?

For details, visit www.realestatetaxletter.com

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Check out my blog.

I have also started a blog at www.michaelgraycpa.com. Check it out!

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P.S.

My daughter and her husband, Holly and Dan Baker, have a Southern French Restaurant at 23 Ross Common, Ross, California, about 15 minutes north of the Golden Gate Bridge. The name of the restaurant is Marché Aux Fleurs and their website address is marcheauxfleursrestaurant.com. For the best meal of your life, call 415-925-9200 for a reservation and give them a try! For directions, visit our website at www.taxtrimmers.com/directions.shtml.

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Michael Gray, CPA
2190 Stokes St. Ste. 102
San Jose, CA 95128
(408) 918-3162
FAX: (408) 998-2766
Hours: 8am - 5pm PDT Monday - Friday

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