Annus Mirbailis 

On November 4, 1992 the Queen of England, on the 40^th anniversary of her accession, described the year which had just passed as "annus horribilis" meaning that she considered it a "horrible year." Actually in classical Latin the phrase would mean "terrifying year" but I suppose if "horrible year" is good enough for the Queen, it will do for me.

The years 1665, 1666, and 1905 have been referred to as "annus mirabilis" - "wonderful year." In 1665 and 1666 Isaac Newton made great inventions and discoveries in calculus, motion, optics and gravitation. In 1905 Albert Einstein first explained the special theory of relativity.

2008 has in many respects not been a good year. The stock market has been gasping for breath, and a rascal, whose last name is appropriate, apparently made off with fifty billion dollars, give or take a few hundred million.

Things will get better. Worse things have happened, and we have survived. I cannot predict the stock market, but I can tell you of some constructive tax changes.

The amount which will pass free of federal estate tax in each estate rises from $2,000,000 to $3,500,000. This means that the number of estates which will actually pay federal taxes will diminish substantially.

The amount of the gift tax exclusion for 2009 rises to $13,000. This means that you can give $13,000 to each of as many beneficiaries as you wish, and your spouse may give the same amount. These will not count for gift tax purposes, if they are gifts of present interests (call us for a definition, or check our web site.)

If you have been taking a required minimum distribution from an IRA, you will not be required to take a distribution for 2009. This will save you some income taxes for 2009 and allow more time for your retirement account to recover.

There will be some tax changes when the new administration gets under way. Someone once said that the only things which are certain are death and taxes, but death does not get worse every time Congress meets!

In future Notes we will keep you informed about some major tax and law changes that may affect you. In the meantime, we wish you an Annus Mirabilis.