Estate Planning, Probate & Elder Law Attorneys

» Nontaxpayer’s Audit Defense Manual
The Nontaxpayer’s Audit Defense Manual is used for “nontaxpayers” only who will be going through an IRS audit.  This manual is not intended or authorized to be used for “taxpayers”, or as a “tax shelter” or way to reduce the liability of a “taxpayer”. Related PostsPost Taxum Syndrome [...]

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» Real Estate Transfer Taxes

Real estate transfer taxes vary greatly in the Chicagoland area. Here is a list (in PDF form). Note, however, that this list doesn't include any changes since July of 2007. For instance, it's missing the recent change (effective 4/1/08) to Chicago's transfer taxes. Traditionally, Chicago's tax was unique in that it was assessed only against buyers -- most transfer taxes are paid by sellers. Chicago now has a transfer tax for buyers AND sellers, at the following rates:

For buyers: $7.50 per $1,000.00 of purchase price

For sellers: $3.00 per $1,000.00 of purchase price (this is in addition to the combined county and state transfer tax of $1.50 per $1,000.00 of purchase price)

According to this article, Chicago now has the highest transfer taxes in the nation!

I used to recommend (somewhat facetiously) moving from Chicago to Oak Park, as Chicago only taxed buyers and Oak Park only taxed sellers. The result would be a pretty huge savings on the opposite move (from Oak Park to Chicago -- Oak Park taxes sellers at a rate of $8 per $1,000.00):

Transfer Taxes (prior to 4/1/08)

assuming sale of $400,000 home and purchase of $500,000 home

Sale in Chicago, Purchase in Oak Park: $600.00 (just county and state transfer tax on sale)

Sale in Oak Park, Purchase in Chicago: $7,550.00 ($3,800 for sale plus $3,750 for purchase)

That's a difference of almost $7,000! Of course, the difference is now smaller -- the tax hit for a "sale in Chicago, purchase in Oak Park" scenario as of 4/1/08 is $1,800.00.

Note that you can still find "bargains" from a transfer tax perspective, as municipalities like La Grange and Hinsdale have no transfer taxes whatsoever. You can use the above list and a little research to check on the municipality to which you are planning a move.

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» 30 Rock, Dr. King, and The Estate Tax

Last night's episode of 30 Rock (still, I think, the funniest show on TV) featured TV executive Jack Donaghy (played by Alec Baldwin) trying to convince Tracy Jordan (played by Tracy Morgan) to become the celebrity voice of the Republican party. Jordan's resulting commercial, meant to appeal to what he first refers to as "blackmericans," is pretty funny:

My fellow black Americans. Dr. King once had a dream, a dream that we all share: to build a 200-foot wall to keep Mexico out. And he also hated the estate tax.

(Later, Jordan says that "I get it -- the Republican party means less taxes, more guns, and the end of the gun tax.") The whole episode is available for free here -- the commercial comes at around 15:45, but the entire thing is really funny (especially Baldwin's Richard Nixon impression).