Law Offices of Connie Yi, PC - estate planning
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Bye-bye DOMA, hello refund for same-sex couples?

| Nov 15, 2012 | Uncategorized |

One of the reasons that same-sex marriage has been passed in other states in addition to California, is because of the preferential tax and legal status granted to married couples. One problem however is that the Defense of Marriage Act, or DOMA, puts the federal government in conflict with the state government. Many of the states’ marijuana laws do the same thing.

According to reliable sources, it appears as though the U.S. Supreme Court may agree to a DOMA challenge before the year is out. Should they do so, and should they overrule DOMA, there could be big tax refunds for a number of same-sex couples, in addition to refunds of estate taxes paid by married same-sex surviving spouses.

If DOMA goes away, the same-sex couples who have been married since 2009 when DOMA passed will be able to file amended returns. It will have to be done quickly though to make the three year time limit for filing amended returns. This means that people who filed their 2009 taxes on time and want to file an amended return, have until April 15, 2013 to file a protective claim.

The types of refunds same-sex couples could expect if DOMA is overturned are:

  • Joint filing: Currently same-sex couples must file separate returns. By filing jointly they would qualify for more deductions and perhaps lower tax rates if their incomes are unequal.
  • Deductions: Same-sex couples could claim the extra tax paid on a home sold in one person’s name only or money gifted to a spouse or health insurance benefits paid from a partner’s plan.
  • Estate tax: The same-sex surviving spouse could inherit the estate tax-free rather than paying a 35 percent estate tax on anything more than $5 million.

One of the cases that the Supreme Court may accept as a DOMA case is that of Edith Windsor in New York who had to pay more than $300,000 in estate taxes when her partner died.

Of course the windfall to same-sex couples could mean that our treasury takes a hit but if history is any guide, they’ll find a way to make up for it. Should DOMA be ruled unconstitutional, it would be a wise idea for any same-sex couple to consult with a legal tax professional prior to filing his or her tax returns in 2013.

Source: KECQ, “Same-sex couples could see tax windfalls,” Blake Ellis, Nov. 14, 2012

Archives

FindLaw Network

Recent Blog Post

Even a fortune can disappear without sound estate planning

Some figures baffle.Like the speed of light. Like the age and size of the universe. And like estimates pegging the personal fortunes of America's richest families.Consider this imagery relevant to the storied Vanderbilt family for a moment: a pile of money equaling...

Remarrying couples unquestionably need to focus on estate planning

Many remarrying California individuals fail to timely consider and update existing estate plans to reflect new realities.Don't be one of them. Many remarrying California individuals fail to timely consider and update existing estate plans to reflect new...

View More Blog Posts