“International Estate Planning,” an in-depth article authored by Michael Karlin, Jane Peebles, and Joohee Jung, was recently published as a two-part cover story in the July and August 2022 issues of the Journal of International Taxation. The article explores a vast range of considerations in cross-border estate planning, including planning for nonresident aliens, residence and domicile, pre-immigration planning, and expatriation. 

Download the full article below.

For 2022, the annual gift tax exclusion amount has been increased from $15,000 to $16,000 per recipient (or $32,000 for married couples), as the IRS recently announced in Rev. Proc. 2021-45. This adjustment applies to gifts of “present interests,” which include an outright gift to the recipient or a gift to a trust from which the beneficiary can withdraw the property.

The IRS also announced the annual inflation adjustment for the federal gift, estate, and generation-skipping transfer (GST) tax exemption, which increases the amount sheltered from taxes from $11,700,000 for 2021 to $12,060,000 as of January 1, 2022.

This increase may be of particular interest to individuals who previously used all of their gift, estate, or GST tax exemption to facilitate significant lifetime transfers. They can now gift that extra $360,000 for 2022 ($720,000 for a married couple). Absent congressional action, the exemption amount is scheduled to revert to an inflation-adjusted $5,000,000 on January 1, 2026—which we anticipate will end up being roughly $6,000,000.

If your spouse is not a citizen of the United States, the amount you can gift to your spouse annually during your lifetime has increased from $159,000 to $164,000.

The gift, estate, and GST tax rate remains at a flat 40% for 2022 for taxable transfers (aggregate of taxable transfers during life and at death) that exceed the transferor’s available exemption.

If you have questions about these changes or any other estate planning questions, please contact Jane Peebles or Cynthia Brittain.

Cynthia Brittain presented “Hot Topics and Strategies for Cross Border Planning: Danger, Water’s Edge Approaching! (A New Paradigm for Cross Border Clients)” at the 2021 California Fellows Meeting of The American College of Trust and Estate Counsel (ACTEC). The presentation is available below.

Jane Peebles taught the "International Grantmaking and Fundraising for the Certified Specialist in Planned Giving" program at Cal State Long Beach for the 19th year. She will teach the program again beginning in May of 2022.

Michael Karlin co-authored an article with Professor Alan Appel in the Journal of International Taxation (Thomson Reuters) entitled "Gain or Loss of Foreign Persons from Sale or Exchange of Partnership Interests," examining Internal Revenue Code sections 864(c)(8) and 1446(f) and recently published Treasury Regulations. The article is available below.

Michael Karlin moderated a panel at the online Fall meeting of the American Bar Association Section of Taxation entitled "Tax Residence and Nexus in the Time of the Plague," speaking with Heather Ripley of Alston & Bird and joined by Jim Wang, Attorney-Advisor, U.S. Department of Treasury and Lara Banjanin of the Office of Associate Chief Counsel (International), Branch 1, Internal Revenue Service.

Comprehensive treatment of the issues faced by foreign owners of U.S. homes held primarily for personal use by the owners and their families.

Related organization(s): Tax Notes Federal
Published in: Tax Notes Federal

Michael Karlin presented to STEP Los Angeles in June 2020 with co-presenters Paul Sczudlo and Megan Jones of Withers Worldwide, and Ryan and Sarah Stein of the IRS Office of Associate Chief Counsel (International).

Related organization(s): STEP
Published in: STEP - Los Angeles

On May 5, 2020, Jane Peebles presented "Retirement Planning with Charitable Vehicles" at the Orange County Advisors in Philanthropy.

Jane Peebles and Jeannette Yazedjian presented "Are We Here Yet? Pre-Immigration and Post Residence Issues" at the 42nd UCLA/CEB Estate Planning Institute.

In this article, Karlin examines the definition of a resident alien under section 7701(b) in the
context of the coronavirus pandemic.

Related organization(s): Tax Notes Federal
Published in: Tax Notes

Michael Karlin, on behalf of the Los Angeles International Tax Club, submitted a letter to Treasury, IRS and Congress requesting guidance on IRC section 7701(b) definition of resident alien to allow aliens to exclude days of presence during national emergency and to expand medical condition exception. The letter is available below.

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