FPA Headlines - Financial Planning Association - National Capital

Continued from the previous page
Rachael DeCosta-Martin, Sponsorships Co-Director
Mitchell Berlin, CFP, Facility Requirements & Social Events Director
Kathleen Sindell, PhD, Chapter Communications Director
Helen Modly, CFP, PR/Media Relations Co-Director
Tommie Monez, CFP, PR/Media Relations Co-Director
Bryan Beatty, CFP, Membership Co-Director
Cliff Cohen, Esq., Membership Co-Director
Tacy Paul Roby, CFP, Pro Bono Director
Howard Pressman, CFP, Government Relations Director
RECENT TAX REFORM RECOMMENDATIONS FROM PERAB
Howard Pressman, CFP
In response to the unprecedented economic events of 2008, President Barack Obama established the Economic
Recovery Advisory Board (PERAB). The 17 member board, which is made up of non-governmental experts is
charged with offering independent advice to the President as he formulates and implements his plans for an
economic recovery. On August 27, 2010, the Tax Reform subcommittee of PERAB submitted to the President
its report on Tax Reform.
While most concerned parties agree that the report offered little in the way of new ideas, there are some
recommendations that are of particular interest to planners. Suggestions of note are:
Consolidate or restructure current retirement plan offerings to facilitate enrollment by low- and
middle-income taxpayers.
Modify capital gains treatment to either (1) convert the separate rates on capital gains into a 50percent
exclusion or (2) replace the zero rate with a 5-percent rate for taxpayers in the 10- and 15percent
tax brackets.
End or limit1031 like-kind exchanges, which allow the deferral of taxes on appreciated property. The
limitations could include separate sub-categories, for example, creating one category for developed
land and another for undeveloped land. Exchanges would not be allowed to cross over into other
categories.
Provide more stringent rules that partners, shareholders in S corporations, and members of limited
liability corporations to pay self-employment tax.
Suggestions were made to eliminate the AMT, however due to the costs associated with its repeal,
the recommendation was to continue with annual patches.
FPA National Capital Area Newsletter Page 4 October 2010