EFTA01019747.pdf

From: Valeria Chomsky > To: "jeffrey E." <jeevacation®gmail.com> Cc: Noam Chomsky Subject: Fwd: FW: Gifts to family Date: Sun, 14 Oct 2018 01:02:15 +0000 Noam is looking for some e-mail where Max or Harry say that they want a list of gifts made to me. I could not find it yet, but I remember that there was something about this. Do you think this e-mail below could be used in any way? Max was trying desperately to prevent Noam to give me any gifts. There are some other e-mails like this. And he kept opposing to the end about Noam transferring to my name the rights of the book Who Rules The World? that was done only because of Gene Landy's insistence on respecting Noam's decision. Thanks. Valeria From: Max Kohlenberg [mailto Sent: Tuesday, May 19, 2015 7:35 AM To: Noam Chomsky Subject: RE: Gifts to family Good morning Noam — It's indeed correct that Sam could distribute $150,000 per year to Valeria (strictly speaking, $147,000) without tax effect. Doing so will have two aspects to consider however. One is that the funds would need to come out of your IRA, thereby triggering additional income taxes (at a rate somewhere above 30%) and the other gets us back to the issue of transferring to Valeria the copyright to Who Rules the World. I don't have an appraisal of that copyright in hand, but based on prior book sales data (which Anthony has given me, with respect to Failed States, among others) I think that the value will be well north of $400,000. Thus transferring the copyright of Who Rules the World to Valeria has major tax implications, which would be very much exacerbated if a transfer of the copyright and a gift of $150,000 were made in the same year. Is there any chance I could drop by your office to discuss some of this in the next week or two? Thanks, and standing by, EFTA01019747 Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, LLP One Financial Plaza — Suite 1600 Providence, Rhode Island 02903 Direct: Main Fax: www.hekblaw.com Please note that effective March 31, 2015, ourfirm name has changed as have our respective email addresses. Ifyou would update your records and use my new email address in your next communication it would be much appreciated. This email and any attachments thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution or copying of this email, and any attachments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by return email and permanently delete the original and any copy of this message or attachment. Thank you. From: Noam Chomsky Sent: Monday, May 18, 2015 5:58 PM To: Max Kohlenberg Subject: FW: Gifts to family EFTA01019748 I think I understand, but I would like to make sure. Here is what I think the facts are. For simplicity, let's say that the limit, pre-tax, is $150.000. Right now Sam is distributing $150,000 annually. I can inform him that from now on he should be distributing an additional $150,000 annually to Valeria. Is that correct? Noam From: Noam Chomsky Sent: Monday, May 11, 2015 12:12 PM To: Max Kohlenberg Cc: Subject: RE: Gifts to family Thanks for the details. I think I understand, but will check in a couple of days to make sure I do. Right now abroad, with very limited intemet access. Noam From: Max Kohlenberg [mailto: Sent: Thursday, May 07, 2015 5:54 PM To: Noam Chomsky Subject: RE: Gifts to family Hello again Noam — The federal gift tax rules are Byzantine (to use a term that somehow seems grander than the IRS deserves). I think the critical ones for your planning are the following: I. You can make a gift of up to $14,000 to any one individual each year and you can make an unlimited number of such gifts, so if you had 20 people that you wanted to make gifts to this year then you would be gifting a total EFTA01019749 of $280,000 "free gratis". 2. If you are married the IRS rules allow you to make use of your spouse's gifting capacity and thereby double the gifts. In other words you could give $28,000 to each individual, saying to the IRS, in effect "Valeria is letting me use her annual gifting capacity, despite the fact that she doesn't have the cash to make the gifts herself". 3. With respect to gifts to a spouse, the normal rule is that gifting is unlimited (so Bill Gates can give Melinda Gates a billion dollars this year and not report anything to the IRS). But with an "alien" spouse the IRS gets back to its obsession with the idea that alien spouses will always "return home" after their American spouse dies and that if they can then take lots of money with them the IRS won't get to collect the estate tax when the alien spouse dies back in her country of origin. With this fear in mind the IRS rules place a limit on how much you can give to your spouse each year if your spouse is not a citizen. The amount you can gift is indexed for inflation and for 2015 that amount is $147,000. How did I do in my attempt at a plain English explanation? Yours truly, Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, LLP One Financial Plaza — Suite 1600 Providence, Rhode Island 02903 Direct: Main: Fax: Please note that effective March 31, 2015, ourfirm name has changed as have our respective email addresses. Ifyou would update your records and use my new email address in your next EFTA01019750 communication it would be much appreciated. This email and any attachments thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution or copying of this email, and any attachments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by return email and permanently delete the original and any copy of this message or attachment. Thank you. From: Noam Chomsky Sent Thursday, May 07, 2015 1:58 PM To: Max Kohlenberg Subject: RE: Gifts to family Thanks. I should have figured that out. I still have a more important question though, about distribution to Valeria. If I understood your letters correctly, the maximum that can be given a year without gift tax is $140,000. My understanding was that under the law, half of his can go to the spouse. I vaguely remember a discussion we had in our living room where, you explained that this was contingent on citizenship. So to be clear, here are my two questions: (1) Is there a provision under the law permitting half of the tax-exempt gift to go to one's spouse? (2) If that is correct, is it contingent on spouse being a citizen? Noam EFTA01019751 From: Max Kohlenberg [mailto: Sent: Wednesday, May 06, 2015 5:53 PM To: Noam Chomsky Subject: RE: Gifts to family Noam — Not surprised at your confusion! A bit of interesting reversal-speak on my part. What I meant to say was "spouses of children", not "children of spouses", and what I was referring to was gifts made to your daughter-in- law and son-in-law. Sony about that. Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, LLP One Financial Plaza — Suite 1600 Providence, Rhode Island 02903 Direct: Main: Fax: Please note that effective March 31, 2015, ourfirm name has changed as have our respective email addresses. Ifyou would update your records and use my new email address in your next communication it would be much appreciated EFTA01019752 This email and any attachments thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution or copying of this email, and any attachments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by return email and permanently delete the original and any copy of this message or attachment. Thank you. From: Noam Chomsky Sent: Wednesday, May 06, 2015 5:14 PM To: Max Kohlenberg Subject: RE: Gifts to family Reading your letter more carefully I was confused about one phrase "two gifts to children of spouses". Can't think of any children of spouses. Am I overlooking something? Noam From: Max Kohlenberg [mailto Sent: Wednesday, May 06, 2015 1:58 PM To: Noam Chomsky Subject: Gifts to family Good afternoon Noam — I'm writing to follow up on our exchanges last night about your gifts to children and grandchildren. The folks at Sam's office provided the backup, which confirms the following: In 2014 and 2015 (as in prior years) you made 10 gifts to children and grandchildren (and two gifts to children of spouses). Each gift was in the amount of $14,000 which is the maximum amount that you can gift in a single year without gift tax issues. In 2014 you also paid $30,000 towards Alaitz's tuition expenses, which is a non- taxable expenditure. EFTA01019753 For the 2014 gifts half the funds came from your IRA withdrawals and the other half came from Carol's trust. Using funds from Carol's trust is not ideal (as the trust represents a reserve that would be less heavily taxed than your IRA in the event of your death) but in 2014 that seemed the better course considering other needs for IRA funds. For 2015 all the funds came from your IRA withdrawals. It's my impression that these distributions are very helpful to your children and grandchildren. For what it's worth they're also good tax planning. As to both elements I know Sam would be happy to join me in discussing them with you further anytime! Thanks, and standing by, Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, LLP One Financial Plaza — Suite 1600 Providence, Rhode Island 02903 Direct: Main: Fax: www.hekblaw.com Please note that effective March 31, 2015, ourfirm name has changed as have our respective email addresses. Ifyou would update your records and use my new email address in your next communication it would be much appreciated. EFTA01019754 This email and any attachments thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution or copying of this email, and any attachments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by return email and permanently delete the original and any copy of this message or attachment. Thank you. From: Noam Chomsky Sent: Tuesday, May 05, 2015 8:04 PM To: Max Kohlenberg Subject: RE: question Thanks. I'd like to get it clear in my mind. Never have understood it. Noam From: Max Kohlenberg [mailto Sent: Tuesday, May 05, 2015 7:55 PM To: Noam Chomsky Subject: RE: question Good evening Noam — I'm afraid those are questions I'm not quite up to answering from home, without your file in front of me. So let me look into this in the morning and then get back to you. Thanks, and hoping all is well, EFTA01019755 Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, LLP One Financial Plaza — Suite 1600 Providence, Rhode Island 02903 Direct: Main: Fax: www.hekblaw.com Please note that effective March 31, 2015, ourfirm name has changed as have our respective email addresses. Ifyou would update your records and use my new email address in your next communication it would be much appreciated. This email and any attachments thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution or copying of this email, and any attachments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by return email and permanently delete the original and any copy of this message or attachment. Thank you. From: Noam Chomsky Sent: Tuesday, May 05, 2015 6:21 PM To: Max Kohlenberg Subject: question EFTA01019756 I'm confused about distributions from the estate that go to my children every year. How exactly is it done? And did it work last year for Valeria? And how will it work this year? Never really understood how this works. Noam EFTA01019757