Businesses of all types and sizes throughout the United States, Mexico and beyond bring their disputes to Gardere's litigation team and receive practical, responsive, boutique-style attention in return. Our clients have access to the firepower and value of a well-known and highly-regarded Firm's capabilities and interdisciplinary strengths.
Gardere has a national and international energy practice formed around our Energy Industry Team, which is a multidisciplinary group of approximately 80 attorneys with diverse backgrounds, experience and skills specific to the energy industry. Our team includes attorneys who have served as in-house counsel for major energy companies, providing a depth of insight into our clients' needs, issues and concerns. We understand and regularly practice in virtually every sector of the energy, and we represent a wide variety of industry participants from multinational corporations to individuals.
From our offices in the United States and Mexico, our International Practice helps clients operate in today’s global economy. We have more than 30 professionals operating as a boutique within an Am Law 200 law firm and are able to provide focused service with the resources of a large firm. We understand that clients who are engaged in the global marketplace need lawyers who can operate seamlessly across multiple jurisdictions. Our international experts are multi-lingual, are culturally fluent and intimately familiar with various legal systems across the world, especially those in Latin America. Whether you need help with commercial transactions, regulatory matters, customs and import regulations, immigration matters, M&A and joint ventures, international disputes, or international tax planning, Gardere’s international team is here to assist you.
We represent domestic and foreign private funds in all aspects of fund formation, fund operations, platform and add-on acquisitions, and portfolio company operations. Our team has a reputation for being the go-to-lawyers for private equity funds, hedge funds, venture capital funds and family offices. We are known for our vast deal experience, the efficient way we staff and manage our work, and the way we maintain our relationships. We get deals done with sophisticated, strategic, and practical advice tailored to the needs of our clients.
*Not admitted to practice law.
Year-end individual tax planning is especially difficult this year due in large part to the following in 2013: (i) the new 3.8 percent nondeductible Medicare tax on investment income and the new 0.9 percent nondeductible Medicare tax on wages of high income individuals, (ii) the scheduled expiration of the 2001/2003 Bush income tax rates, (iii) possible limitations on itemized deductions and personal exemptions, (iv) doubt regarding renewal of extending various tax benefits, (v) a scheduled dramatic decrease in the estate and gift tax exemption and increase in estate and gift tax rates, and (vi) the threat of massive federal spending cuts. Although 2012 is about to close, it is uncertain whether the lame duck U.S. Congress will successfully avert the "fiscal cliff" resulting from more than $600 billion in federal tax increases and spending cuts automatically scheduled to occur in 2013.
Obamacare Medicare Tax Increase. The following additional Medicare taxes will be imposed on certain individuals, starting in 2013 (individuals not filing joint returns are subject to different thresholds).
Medicare Tax On:
Lesser of i) net investment income; or ii) the excess (if any) of the "modified adjusted gross income" (MAGI) over $250,000
Medicare Tax on Excess Investment Income. Net investment income includes (a) capital gains (including gain on disposition of interests in partnerships or S corporations attributed to the entity's nonbusiness property), (b) income from partnerships, LLCs and S corporations if a taxpayer does not materially participate, (c) dividends, royalties, interest and rental income, and (d) gain from sale of residence exceeding the $500,000 exclusion for married filing joint ($250,000 exclusion for other individuals).
Thus, the 3.8 percent Medicare tax does not apply if the taxpayer's MAGI does not exceed the threshold (e.g., $250,000 for married filing joint).
Medicare Tax on Excess Compensation. Total Medicare tax for affected employees and other service providers increases from 1.45 percent to 2.35 percent on compensation above $250,000 for married filing joint (above $125,000 for other individuals). Compensation subject to 0.9 percent tax includes self-employment earnings. Compensation subject to the new 0.9 percent tax is not capped.
Expiration of Bush Tax Cuts. The Bush Tax Cuts enacted during 2001 and 2003 are scheduled to automatically expire, unless legislation is enacted to extend or modify such cuts.
Potential Opportunities. Commencing in 2013, the additional 3.8 percent and 0.9 percent Medicare taxes will increase the tax burden of many individuals. Further, if the Bush tax cuts expire at the end of 2012 without modification, the overall tax rates of certain individuals may increase significantly.
Individual taxpayers should consider the possible financial benefits and detriments of tax planning strategies to mitigate the tax costs relating to 2013 tax increases, including (i) accelerating into 2012 capital gain from the sale of assets, or bonuses and other ordinary income, that otherwise would be recognized during 2013, (ii) electing out of any 2012 installment sales, thus subjecting the deferred gain to 2012 tax rates, (iii) completing a Roth IRA conversion before 2013 to offset against income taxed at a higher rate, (iv) invest in tax-exempt bonds (avoiding the 3.8 percent Medicare tax on the exempt interest), (v) defer triggering 2012 losses until 2013, and (vi) possibly deferring deduction of itemized deductions (although the benefit of such deferral may be partially or totally offset by new limitations on itemized deductions in 2013). Of course, it is impossible to predict with any certainty whether Congress will seek to extend, modify or otherwise limit the Bush tax cuts for 2013.
Expiration of the Bush Tax Cuts would also raise the maximum marginal estate and gift tax rate and reduce the federal unified estate and gift tax exclusion, effective Jan. 1, 2013, as follows:
Possible 2012 Estate and Gift Tax Planning. Consideration should be given to making large gifts in 2012 that exceed $1 million to the extent the exclusion is available. Further, estate plans should be reviewed in the near future to determine if they need to be updated for the new exemption thresholds. However, individuals should undertake such planning knowing that it is uncertain whether Congress will extend or modify the current estate and gift tax rates and exclusion.
If you have questions related to the new 2013 income/Medicare taxes, the scheduled expiration of the Bush income tax cuts, or other income tax issues, please contact Michael J. Donohue (email@example.com or 214.999.4231) in Gardere's Dallas office, James Howard (firstname.lastname@example.org or 713.276.5391) in Gardere's Houston office, or any other member of the Gardere Tax Team.
Any questions related to the estate and gift tax provisions of the Act or other gift and estate tax issues, please contact Keith V. Novick (email@example.com or 214.999.4238) in Gardere's Dallas office, Lawrence J. Pirtle (firstname.lastname@example.org or 713.276.5721) in Gardere's Houston office, or any other member of the Gardere Trust and Estate Planning Team.
The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.
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