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November 30, 2018In the News

Wealth Management: Economic university and tax law changes require changes in investment strategies and estate planning

Milwaukee Business Journal

Michael Best Partner Bradley Kalscheur was featured as a panelist in the Milwaukee Business Journal’s discussion, “Wealth Management: Economic uncertainty and tax law changes require changes in investment strategies and estate planning.”

Volatility and tax reform have changed the economic landscape, prompting people to rethink their approaches to investing and charitable donations. For business owners, there’s new considerations concerning the type of business structures they should utilize as well as whether now is the time to consider selling or transferring ownership of their businesses. Because of these changes, The Milwaukee Business Journal recently assembled a panel of experts to explore the challenges and opportunities.

Moderator:

What political or economic trends are you paying the closest attention to and why?

Brad Kalscheur:

We’re watching the impact of tax law changes and what else might be coming down the pike, although with the change in Congress, you’re probably not going to see any big changes over the next two years. We’re also keeping our eye on tariffs. It’s a very important issue for our business clients. They’re concerned about both the short-term pain and long-term impact.

Moderator:

Let’s talk about tax reform? How has federal tax reform legislation impacted your recommendations and advice for clients?

Brad Kalscheur:

One of the biggest changes with tax reform is the Section 199A deduction, which is prompting business owners to rethink whether they are going to convert from C corporations to S corporations, LLCs or other pass-through organizations. Another significant change is the increase in the estate tax and gift tax exclusions amount. It is $11.18 million per taxpayer in 2018 (increasing to $11.4 million in 2019), which means the estate tax is no longer a concern for 99 percent of people. That’s significant because the specter of estate taxes impacts how family farms and family-owned businesses are transferred from one generation to the next. You are also going to see people doing their charitable giving a little differently because of the tax law changes, especially due to the increased standard deduction coupled with the $10,000 deduction limitation on state and local taxes (SALT). Many people will bunch their donations, which means you make two years of contributions in one year so you can get past the threshold to itemize your deductions. The next year you take the standard deduction.

To read the entire interview, visit the Milwaukee Business Journal’s website here.

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