The court has approved retroactive changes to the tax code. For example, NJ raised their tax rates mid-year, someone had sold stock before that, but he had to pay the higher rates. The courts side with the state of NJ. I think it was the Supreme Court, but not sure. So the question is whether these retroactive changes apply only to the start of the year, or can they apply to previous years, and do they apply only to general federal/state income tax rates?
In article , snipped-for-privacy@yahoo.com ( snipped-for-privacy@yahoo.com) writes: | On Jan 20, 2:46 pm, ddl@danlan.*com (Dan Lanciani) wrote: | > In article , snipped-for-privacy@yahoo.com ( snipped-for-privacy@yahoo.com) writes: | | > | Note that the 250k/500k exclusion on the sale of your primary house | > | does not apply under the expatriation tax. So if you have 1M gain on | > | your primary home, that will be counted for the expatriation tax | > | (although they have a 600k or so exemption). | >
| > I don't; however... | >
| > | So better to sell your | > | home, move into an apartment, take the exclusion, and then expatriate. | >
| > This comment and the possible things one might do with a Roth suggest to | > me that as the new rules are tested we will see the addition of some sort | > of lookback period for ``actions taken in anticipation of expatriation.'' | | The court has approved retroactive changes to the tax code.
I was talking about the addition of a statutory lookback period rather than a retroactive change, though I suppose they could apply such a lookback retroactively. :)
| For | example, NJ raised their tax rates mid-year, someone had sold stock | before that, but he had to pay the higher rates. The courts side with | the state of NJ. I think it was the Supreme Court, but not sure. So | the question is whether these retroactive changes apply only to the | start of the year, or can they apply to previous years, and do they | apply only to general federal/state income tax rates?
We had an interesting case here in Massachusetts. (Hopefully I won't get this too wrong.) Basically, they raised the capital gains tax in the middle of a year. This was challenged (I suspect by someone with large gains in the second half of the year of the change) and the court ruled that retroactive changes were fine but that our constitution forbids changes part way through the year. The state had the choice of moving the increase back half a year or forward half a year, and time was running out on the assessment statute. (I think the court made it clear that if the state tried to stall to get the effect of leaving things as they were IT WOULD BE BAD.)
The state initially moved the increase back half a year. Many notices went out (I got one myself) assessing the new tax and interest and penalty. (The DOR was sort of apologetic about the penalty but claimed they did not have statutory authority to waive it and were trying to get permission.) There was much moaning and gnashing of teeth. The state changed its mind and moved the increase forward half a year instead.
Dan Lanciani ddl@danlan.*com
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