Wednesday was a difficult day for The American Independent News Network, which is the larger entity that operates The Iowa Independent. Our chief executive and founder announced two of our sister sites would close and their content would be moved to The American Independent.
A recently introduced bill could have far-reaching impact on the U.S. sugar industry, including American Crystal Sugar, a farmer-owned cooperative that locked out 1,300 Midwest workers on Aug. 1.
The chairman for Herman Cain’s Iowa effort says the campaign “relied more on the word of farmers than Washington regulators” in deciding to run an ad containing claims the Environmental Protection Agency says are false.
The Iowa Senate will remain under the control of a slim 26-25 Democratic majority when it reconvenes in January 2012.
A child whose parent dies before he gets to college may end up paying the state tax man up to 20 percent of his 529 college fund under a relatively new and unknown interpretation of inheritance tax policy from the Iowa Department of Revenue and Finance (IDR).
Individually, this could have devastating effects on the educational futures of young Iowans, and collectively, it could mean that millions of dollars that would flow to colleges and universities would now go right to inheritance tax, penalties and incomes tax, says Iowa Savings Bank Vice President Michel Nelson, a nationally recognized expert on trusts and estate planning.
“We’re talking major dollars in there,” Nelson said.
Nelson told Iowa Independent he is outraged with what appears to be a dramatic change to settled practice. He is working with his colleagues to press legislators to remedy the matter — and create a situation where the state views the tax-free 529 plans as the federal government does.
“It has been assumed no tax is payable,” Nelson said. “Federally, there is no question.”
For some time, 529 plans have been an outstanding way for families to save for the spiraling tuitions and associated costs at public and private schools. But with the new wrinkle, Nelson and other financial professionals are going to hit the pause button until state legislators can address the issue.
“It’s become clear that suddenly 529 plans have a giant wart on the nose and overnight have become very unattractive,” Nelson said.
Nelson, who serves as vice chairman of the probate and trust law section of the Iowa State Bar Association, sent a letter to IDR director Mark Schuling expressing concern about departmental correspondence revealing the change.
Families with 529 funds now believe that if a parent dies, and the designated successor is an uncle of the kid, that the money is that of the child’s and not subject to taxes, Nelson said.
“I believe legislators would be shocked that the surviving child’s college fund will be assessed significant taxes,” Nelson said.
Do you know where to vote on Election Day? Do you know what to bring with you? Get comprehensive voter information for your state here.
Sign up for our email newsletter