2009

A Bright Spot in the Dismal Housing Market

Posted on July 17, 2009 at 7:17 pm in

The housing market has taken a biog hit over the past 6 months, with the prices of houses tumbling and overall inventories of unoccupied homes increasing in many major markets including Florida, New Jersey, and Arizona. As mortgages start to adjust from adjustable rate mortgages, the payments are sometimes too high for owners and the home values too low to refinance as anticipated. This has led to ongoing foreclosures throughout the country. As the amount of empty homes increases, the money and resources spent to build new homes decreases. As soon as unoccupied inventory starts to sell, we may see a rapid increase in new home building.

The most recent house market predictions indicate a rise in new home starts and point to the fact new home building permits increased almost 9 percent in June. This indicates more activity than anticipated in building and gives rise to the hope of a developing trend toward sold homes and new home construction. This would be a leading indicator of positivity regarding the economy and an indication of consumer confidence. This trend counters past theories that the downward trend will continue through the next three months and that inventories will increase and new home building will continue to decrease.

The economic state that we are currently in plays a large role in the current overall housing decline from last year as many are jobless and others are forgoing any new home purchases due to lack of funds or credit issues related to their debt load. As the economy improves, we should see an increase in home purchases which will most likely be followed by an increase in new home construction. As people get back on their feet and find new jobs or ways to refinance their adjustable mortgages, the spending increase will have a dramatic effect on each individuals buying power and the home market in general.

Oklahoma Estate Tax

Posted on May 27, 2009 at 9:15 am in

The estate of any person who dies while a resident of Oklahoma, or a nonresident owning real property in Oklahoma, is subject to Oklahoma Estate Tax Laws. The fair market value of all assets at date of death or the alternative valuation date must be included in the gross estate.
All real or personal property, whether tangible or intangible, belonging to the deceased resident is included in the estate (see exclusions for spouse, below). The following are also included in determining the gross estate:
• Value of gifts made during three years prior to death, unless proof is furnished that gift was not made in contemplation of death. Credit will be allowed for gift taxes paid if such gifts are included in the estate. The three year contemplation of death provision is still in effect. (Title 68 O.S. Section 807(A)(2))
• Full value of property at date of death for transfers made while living in which the deceased retained some control.
• The full value of property owned in joint tenancy unless proof can be shown that part of the property was acquired through inheritance or moneys of the surviving joint tenant. Property owned with a spouse in joint tenancy is excluded.
• All life insurance policies owned or controlled in any manner by the deceased.
• All property must be valued at the fair cash market value, determined at time of death or six months thereafter. The assessed value for ad valorem taxes does not determine the value for estate taxes.
• Also, the remainder portion of life estates and trusts left to someone other than the surviving spouse will be in- cluded in the gross estate.

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Federal Gift Taxes

Posted on May 17, 2009 at 9:15 am in

For gifts made in 2007 and thereafter the annual exclusion has been increased to $12,000 per recipient. Since 1997, the excludable amount has been indexed for inflation, but will only move in $1,000 increments. With gift-splitting, spouses may transfer $24,000 per recipient per year without gift tax even if one spouse owns all of the property. The consent of the spouse not owning property must be signified on the gift tax returns.
Also, an unlimited gift tax exclusion is allowed for amounts paid on behalf of a donee directly to an educational organization for tuition and to a health care provider for medical services.
For a gift in trust, each beneficiary is treated as a separate person for purposes of the exclusion. The annual exclusion is not available for gifts of future interests such as a remainder interest in a trust or life estate, except for gifts to minors in trust or under the Uniform Gift to Minors Act.
Gifts given within three years of death generally will not be included in the deceased donor’s estate. (The taxable portion of gifts would be included in the tax base for estate tax computations.) However, gifts with retained life estates, transfers effective at death, revocable transfers, transfers of general powers of appointment and transfers of life insurance will be included in the estate. The three year rule was retained for redemption of stock to pay estate taxes, special valuation of certain farm property, extension of time to pay estate tax, and for determining property subject to a lien for taxes.
Beginning in 2004, the gift tax exemption equivalent will remain at $1,000,000 even though the estate tax equivalent exemption continues to increase. In 2010, although estate taxes will be eliminated, gift taxes will remain in effect with a maximum rate of 35 percent and a $1,000,000 exemption equivalent amount.

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