The first thing to establish is that whether or not the seller has the qualifying interest. This means that they are entitled to the capital allowances. With outright buying and selling, the interest will automatically transfer to the buyer. Leases however are somewhat more complex; when a lease is granted, the lessor will usually be granting a lesser interest and therefore, by default, keep the qualifying interest for themselves.

It should be noted that there is an exception in the case of development; say a developer renovates a commercial property and leases it on, the qualifying interest and capital allowances would pass to the lessee automatically. This is because the developer treats the office as trading stock, which is of course ineligible for capital allowances, because as far as the developer is concerned, developments are the ‘output’ rather than ‘capital’. The lessee on the other hand will be using the property as capital – either by leasing or renting it out or using it directly.

Section 183 election

As previously mentioned, the lessor will not want to lose their capital allowances. To prevent this from happening they will retain the qualifying interest by granting a lesser interest to the buyer. However, the lessee can still obtain the capital allowances it the lessor agrees to a Section 183 election; this means that entitlement to capital allowances is transferred to the lessee enabling them to claim instead. There are mutually beneficially reasons for entering into an election. It may be that the lessee pays tax at a higher marginal rate than the lessor and would therefore be able to claim back a greater amount of money. If the lessee agrees to compensate the lessor for the loss of their potential capital allowances, then the buyer will be able to keep the difference and both parties would benefit.

As an example, let’s say there is a lease being granted and the lessor is a small business that pays tax at 20% and hold the qualifying interest while the buyer is an individual paying tax at 45%. The property has £10,000 of capital allowances. If the parties were to just stick to the default position with the lessor retaining the rights then the lessor would have a pool of £2,000 to claim over a number of years while the buyer would have nothing. However, if the buyer and lessor were to enter into a Section 183 election transferring the qualifying interest to the buyer, then the buyer would have a pool of £4,500 to claim. The buyer could then compensate the lessor the forgone £2,000 and keep the remaining £2,500. Of course when lessor could bargain for a higher share of the £2,500 extra benefit during negotiations! The end result is that both parties will be better off (and certainly no one will be any worse off).

So to sum up, it is important to ensure that you have acquire all necessary information before negotiations and remember that by be willing to cooperate and making sure that the other party possesses all the facts relevant to capital allowances, it could be that both parties would benefit.

In our 27th episode of the Madness Chronicles, we’ll take a look at the madness taking place in the upcoming election. Remember, madness is a state of being mentally ill, severely, extremely foolish behavior, and a state of frenzied or chaotic activity. Let’s take a look at our current election madness.

In Los Angeles County, California, it’s been found that 2,100 ballots mailed for the upcoming election had no box on it to vote for President. A curious mistake. Moving to the east coast, in Bergen County, New Jersey, US Postal Inspectors were alerted to a discovery of a large cache of mail discarded in a dumpster. The investigation continues, but they have found hundreds of ballots for the election.

The State of Colorado is being sued in federal court for having more voters on the rolls than there are eligible people to vote. In 40 of 64 counties, there are more people registered to vote than there are people to vote. Umm? Does that seem, right? KCNC-TV in Denver recently reported that postcards are being mailed to illegal aliens and dead people asking them to register to vote. One lady said that she received a postcard for her dead Mother. The Mom died four years ago and hadn’t lived in Colorado since 1967. May have something to do with having more voters than people?

In Minneapolis, the district of Congresswoman Ilhan Omar, an undercover operation by Project Veritas has uncovered a pay for vote scheme in favor of the outspoken Somali. Maybe she wanted to feel closer to home? The police are now investigating.

In Fort Worth, Texas, was the recent arrest of four women involved in a voter fraud ring operating primarily in the city. In Anne Arundel County, Maryland, the Board of Supervisors recently issued a public notice. Seems they’ve been made aware of people going door to door soliciting ballots specifically regarding the upcoming Presidential election.

In Massachusetts, GOP candidate Dr. Shiva Ayyardurai says he has proof that over 1,000,000 ballots were altered or destroyed in the most recent primary. In Florida, it was found that election official Brenda Snipes allowed illegal aliens and felons to vote, and she was found destroying ballots. What has happened to people?

In Houston, Texas, the Public Interest Legal Foundation (PILF) has filed suit to force the cities election registrar to follow Texas law when registering people to vote. That would seem like a no-brainer, but the PILF attorneys have filed a court brief outlining how the city has permitted ‘non-citizens’ to register and vote.

Project Veritas struck again in the Big Apple. They have a Board of Elections Supervisor on video sharing how he’s been fixing elections in New York City ‘for years.’ The New York Post reported an exclusive with an ‘election fixer.’ He agreed to meet with them on the condition of anonymity. He walked them through how vote fixing is done. He said his fingerprints were on elections from Paterson, Atlantic City, Camden, Hoboken, and Hudson County. Also said he’d done local, state, and federal elections.

Despite overwhelming evidence to the contrary, most Americans turn their collective heads and say ‘nothing to see here.’ We’ve become the real Banana Republic.

May we wake from this madness before it’s too late. I wish you good health, and until next time, have fun, enjoy life, and watch out for the madness amongst us. It’s 2020, and it’s getting out of hand.

How often, have we heard, someone state, it doesn’t matter who he votes for, nor, who we elect to public office, because, they’re all the same, anyway? Although, there have been many instances of elected officials, who failed to honorably, keep their bond, which was supposed to be, to serve and represent their constituents, rather than their personal/ political agenda, and/ or, self – interest, even many of those, who always made this statement, realized, after the Presidential election of 2016, elections have consequences! Does anyone, really, believe, Donald Trump, has conducted himself, in any manner, like his competitor, would have, not only in terms of his demeanor, rhetoric/ vitriol, etc, but in terms of his priorities, actions, etc? With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 7 examples, of this reality, and its significance.

1. SCOTUS – Supreme Court: Already, we have witnessed, how politics impacts Supreme Court, and other, Federal court appointments. Senate Majority Leader Mitch McConnell has pushed – through, a record – number of lower court appointments, several of which, the Bar Association, evaluated, and considered, unqualified. In 2016, McConnell refused to bring President Obama’s choice to fill a vacant Supreme Court seat, stating he would not do so, in the last year of a President’s term of office. After the sad passing, of Justice Ruth Ginsburg, many of these, same, Republican Senators, are pushing to ratify Trump’s upcoming choice, for this position, despite the fact, it is so close to the election. Did someone use the word, hypocrites? Many issues, such as those, regarding the election, itself, voting rights, civil rights, immigration, the Balance of Powers, a woman’s right, to choose, etc, are, potentially, at – risk, with our established policies, and may be determined by this Court!

2. Immediate/ short – term policies: Trump’s many attempts to implement his personal priorities/ agenda, by using Executive Orders, especially, related to eliminating/ reducing environmental regulations, and denying Climate Change, and the questionable way, he handled the pandemic, as well as his approach, to foreign relations, clearly demonstrate, it does matter, who we elect!

3. Longer – term impacts: Of course, his court appointments have long – term ramifications, but, his attack of environmental protections, denying Climate Change, and, his economic policies, also, are significant! Again, it is doubtful, many others, would behave, or proceed, as he has!

4. Priorities: What a President’s priorities are, generally, dictate, how he proceeds, and where he places his emphasis! Rather than seeming to have any positive priorities, Trump’s deciding – factor, often, seems to be, to attack, anything associated, with his predecessor!

5. Human, civil, womens, and LGBT rights: For nearly four years, we’ve observed an attack on many of the rights, we’ve taken for granted! We have never witnessed, in recent memory, any President, who, had Trump’s attitude, toward immigrants, certain ethnicities, civil rights, gay – rights, and a woman’s right – to – choose, etc! How pervasive is this, especially, when you consider, how fervent his core supporters, seem to be, and how, his behavior, and rhetoric/ vitriol, seems to have enabled them?

6. Environment and climate: This President has probably, destroyed, much of the progress, in the environmental protection, and climate change, areas, which took decades to achieve! How many decades have we lost, and can the nation, and the planet, afford this behavior, which seems, to either, not care, or denies, the sustainable changes, and necessities?

7. Public Health: Rather than letting the health, and science, experts, lead – the- way, when it comes to policy, regarding public health matters, such as policy to address this horrific pandemic, President Trump claims he is a stable genius, and knows better, than the experts. Since, the United States’ population is roughly 5% of the world’s, an average performance, would mean, we’d have a similar percentage of cases, and fatalities. Rather, we have roughly, 20%, of these metrics, and we should be concerned! Experience, expertise, judgment, character, and how one decides, does make a significant difference!

Wake up, America, and make your vote count/ matter, by determining, which candidate, is, best – suited, for the position, rather than, one’s celebrity, entertainment value, rhetoric/ promises, etc! Will you try to become a more responsible voter?

The academic bubble is ready to burst, all the while academics in their infinite wisdom tell us they know best how to run our society and civilization – don’t you find that odd? It seems they haven’t gotten their own house in order, and yet, want our entire country to run like a giant college campus – interesting indeed. These same academics want to tell us how to vote, re-distribute wealth, and how to think – well, I think their day of reckoning is right around the corner – and I fear what’s to come will not be pretty. No, I don’t want to be the one to say; “I told you so.” Surely, there are others with more social media followers who see the reality of the situation to spread that in-your-face slap when the time comes. Okay so, let’s talk shall we?

40% of the student loans are in technical default (90-days in the rears with no further agreement to catch up on payments). That is 583 Billion Dollars in defaulted loans that we may never see payment of. Trust me when I tell you that the College Loan Bubble has burst and is extreme crisis. Why is this allowed to continue? Well, if it stops it will collapse academia, become a huge problem for our Federal Government, add over 1/2 Trillion to our $20 Trillion National Debt, and cause the angst of millennials who the Democrats have all but promised “Free College For All” during the 2016 Presidential Election.

Still, by the time the election is over the Student Loan debt will be 1.57 Trillion Dollars, even though the official figures claim it only 1.2 Trillion which was actually the figure before the start of the 2015 Academic Year.

If you don’t see the enormity of the problem, let’s talk about the auto industry right now. It turns out that the number of “Subprime” auto loan defaults are at another all-time high of 4.5% – Subprime meaning loans made to those without proof of ability to pay or marginal credit ratings, perhaps coming from low-socioeconomic borrowers. Last time this happened the auto industry crashed and needed a big bailout, and we are reaching those same numbers now – and realize this is only 4.5% not 40-50% like the student loan problem.

Scared Yet? Well, it is Halloween 2016 today, and I am, and no, there won’t be any good witches flying in on their brooms to win the next election to use hocus pocus to make this problem go away – indeed, both presidential candidates are likely to see the auto loan problem get worse, as well as the student loan debt problem – not to mention our stock market breaking all-time highs with PE Ratios and major stock market indices records.

Revenue Ruling 70-604 states that “a meeting is held each year by the stockholder-owners of the corporation at which they decide what is to be done with any excess assessments… “.

This wording is generally interpreted literally to mean that only the members can make the election. The board of directors cannot make the election. This interpretation places the election approval process directly in conflict with state law (for at least every state in which I have researched this issue), which prescribes that only the board of directors may make decisions regarding disposition of association funds; the members cannot do so. That’s why directors were chosen to represent them.

Associations continually tell me that they can’t get a quorum of members to make a legal vote, or that they have difficulty getting the members to approve an election under Revenue Ruling 70-604. The follow-up question is, “Can’t we just have the Board of Directors make the election?”

The answer is probably yes, but that depends on how much risk you want to take or how much money you want to spend fighting the IRS on this issue. An argument made out of context to the IRS that “the board must make the election because only they have the authority to do so” is a losing one. (If you don’t believe me, just ask any IRS agent.)

The IRS interprets this Ruling very literally to mean that the stockholder-owners must make the decision, because that’s what the Ruling says. The IRS is bound by the Internal Revenue Code and Federal Court cases, but is not bound by state law, non-judicial precedent, or any other precedent except those of their own making. The IRS must follow its own Revenue Rulings whenever they apply to a given situation.

The IRS doesn’t care what state law stipulates, or who has the actual authority to make a decision regarding the disposition of association funds. They only care what their Ruling says, and it says “stockholder-owners,” not directors. However, the phrase as stated by the IRS makes sense ONLY if the members have the authority to determine the disposition of association funds.

It takes only a subtle change in interpretation to change the face of the argument entirely. When working under Revenue Ruling 70-604, pay careful attention to the subtleties of phrasing: “A meeting is held each year by the stockholder-owners of the corporation at which they decide what is to be done with any excess assessments… ” The phrase “they decide” clearly implies that the stockholder-owners have the authority to make the decision. In fact, they don’t. The IRS was simply unaware of this aspect of association governance at the time the Ruling was issued.

I discussed this issue several years ago with the national office of the IRS, and they conceded that their only interpretation was a literal one, meaning the members had to make the election. I suggested an alternate interpretation: “A meeting is held each year by the individuals in the association who have the authority to make the decision (the board of directors) at which they decide what is to be done with any excess assessments… “. The IRS agreed that my interpretation had merit because the Ruling has no basis if the individuals making the election do not also have the authority to determine the disposition of association funds.

Winning an argument with the IRS isn’t done by telling them that their Revenue Ruling is wrong. Winning the argument is done by showing them how their Revenue Ruling really conforms to the facts. The board makes the election because they are empowered to do so, and that’s what the Revenue Ruling says (in substance, not literally).

Having now discussed the issues, what is an association to do? Well, do you want to comply with what the IRS requires and have the members make the election, or would you prefer to fight them and have the board of directors make the election?

The fact is, you can take a simple action to satisfy both state law and IRS requirements.

I recommend to clients that the members make the election, usually at the annual meeting, although any legal vote of the members will suffice. Then, have the Board ratify that election at their first meeting after the annual meeting. That way, you’re covered no matter how you interpret the ruling.

New York case and statutory law imposes upon New York State resident spouses many duties during life; a spouse cannot avoid some of those duties in death. The surviving spouse is entitled to a minimum share of the deceased spouse’s estate.

The law carefully defines the amount to which a surviving spouse is entitled. The share to be paid cannot be avoided by most inter vivos transfers, but as with any right, it can be affected by the claimant’s words and actions. The provisions of Estates, Powers and Trusts Law 5-1.1-A (EPTL) affect the manner in which the elective share is measured, its character and from what property it shall be paid.

A spouse’s elective share equals the greater of (1) $50,000 or (2) one third of the net estate. The calculation of a spouse’s elective share is not based upon the size of his or her own assets, regardless of the source of such assets.

The elective share is a pecuniary amount, not a fractional share of the estate. Thus, income earned by the estate prior to its distribution will not be included, nor will the appreciation or depreciation of estate assets be taken into account. The computation of the surviving spouse’s elective share is only part of the process. The share of the testamentary provisions to which the surviving spouse is entitled is his or her elective share amount, reduced by certain interests passing to him or her. The amount as so reduced equals the surviving spouse’s “net elective share”.

A decedent’s estate consists of the property passing under his or her will, property passing by intestate distribution pursuant to EPTL 4-1.1, plus the “testamentary substitutes” described in EPTL 5-1.1-A(b)(1). A decedent’s net estate is determined by reducing the decedent’s estate by debts, administration expenses and reasonable funeral expenses. For right of election purposes, the decedent’s estate includes all property of the decedent wherever situated. Thus, the surviving spouse has a right of election against real and other property of the decedent located outside New York State.

All estate taxes are to be disregarded in calculating the net estate. The surviving spouse, however, is not relieved of contributing the amount of such taxes, if any, apportioned against him or her under EPTL 2-1.8. The reference to apportionment under EPTL 2-1.8 includes apportionment pursuant to a direction in the decedent’s will, which is one method of apportionment permitted by EPTL 2-1.8.

Unless the decedent has provided otherwise, generally no taxes would be apportioned against the surviving spouse to the extent that property passing to him or her qualified for the marital deduction. In most cases, property interests that satisfy the elective share also will be eligible for the marital deduction. Exceptions include property passing outright to a surviving spouse who is not a United States citizen and cash bequests that, pursuant to a direction under the will, are used to purchase an annuity for the spouse. Even if the spouse’s share is eligible for the marital deduction, a contribution to the estate’s estate taxes may be required insofar as the estate taxes are attributed to pre-death transactions rather than to property included in the gross estate.

Not all obligations are treated as debts for purposes of defining the net estate. If they were, an individual could easily defeat his or her spouse’s right of election simply by executing a contract to bequeath his or her estate to some other individual or individuals. New York courts, for example, have held that an obligation contained in a separation agreement to bequeath a portion of an individual’s estate or specific assets to a former spouse is subordinate to a subsequent spouse’s right of election. The beneficiary of a contract to make a bequest often is viewed by the courts as a legatee rather than as a creditor. In contrast, a decedent’s obligation under a separation agreement to make post-death alimony payments is treated as a debt that reduces the estate that is subject to the right of election. The distinction between the two is tenuous. A debt that matures on the death of a decedent spouse seems to fall somewhere between the two. It is unclear how it will be treated under EPTL 5-1.1-A.

It’s getting to be that time of year again when associations are thinking about year-end procedures, one of which is making the annual election under Revenue Ruling 70-604.

I have been asked a number of times what those numbers mean. “70” signifies the year in which the ruling was issued (1970), and “604” simply represents the numerical sequence of the ruling for that year. This was ruling number 604 issued in 1970.

As a CPA, I receive more questions about the application of Revenue Ruling 70-604 than on all other tax issues combined. Several of my articles on the subject of Revenue Ruling 70-604 are posted in various places on the web, so I routinely get “found” and questions are routed in my direction. One question I receive over and over is “when do we make the election?”

While Revenue Ruling 70-604 is one of our most powerful tax planning tools for associations filing Form 1120, it also is the one most subject to interpretation. One reason for this is that the Ruling itself is so brief – only two paragraphs in length. The absence of internal definitions within the Ruling means that readers have to interpret it and make their own definitions for almost all critical issues within the scope of the Ruling, including the timing of the election.

Because so many areas of this Ruling are subject to interpretation, many years ago I contacted Mr. Ransom (who drafted Revenue Ruling 70-604) at the Internal Revenue Service (IRS) National Office, to discuss this and other matters. When I pointed out the ambiguity in the Ruling with respect to the timing of the election, Mr. Ransom stated that he felt that there was no ambiguity, as the matter was purposely worded so that the Ruling would be flexible. I specifically asked Mr. Ransom if an association could make their election after their fiscal year had ended, and he affirmed that they could. He agreed that the only limitation on the timing of the election is that the election must be made before the tax return is filed, and must be made on a timely filed return.

I also asked Mr. Ransom if it was possible for an association to make an election before the fiscal year had ended. He agreed that it would be possible to make the election in this manner, since the Ruling was purposely drafted to be flexible by stating that “any” excess could be carried over from one year to the subsequent year. That means that one does not have to state a specific amount that would be carried over from one year to the next, nor does one even have to know if there will be any excess.

There is no downside risk to making an election under Revenue Ruling 70-604. If an association does not have an excess of membership income over membership expenses, the election will simply not apply to that year. It would be the same as if no election had been made. If an association files Form 1120-H instead of Form 1120, then no election is needed, so again, the election will simply not apply to that year.

The current American election was brutal. Millions of people all over the globe hated the outcome; myself included. Past elections have brought the same disbelief. Many voters couldn’t believe when George W. Bush or Barack Obama were elected. There will always be an election or a time period that causes extreme stress. I’m not saying this change will be good or bad, but we have to deal with the stress, anxiety, and the fear as a by–product of the current American Election.

Modified yoga helps ease the post-election stress that ricochets across the globe right now. The meditations during class helps to keep one calm, and to see that in this present moment nothing more has happened. What has happened is a candidate has been elected. The breathing and focus of the yoga poses, allows participants to focus only on the poses and tasks at hand.

The visualization exercises of the classes assist my clients in imagining natural spaces; like the water, or the mountains where they see and feel themselves calm, peaceful, nurtured and protected.

It gives participants moments to connect to the divine energy of this planet, and to access earth wisdom; that is as old as the earth, to show them, the best solutions, for what is going on right now on the planet.

This election also shows, the great division which has occurred, in America and across the world. Something has been brewing for a very long time. The unrest is a symptom of what is there. We have a choice; to look at the outcome, and really understand, that an energy is present right now, which brought about this outcome. If this election outcome hadn’t have happened, nobody would protest for change, no one would have noticed, the degree of division, and dissatisfaction that exists.

People begin to ask themselves, how did this happen, and what can I do now. In modified yoga classes, and meditations, participants gear for change, focusing wholly on what is good, and to make a distinction of what they don’t want. The mind is clear and calm, and that helps one to know what to do next. Sometimes there is nothing to do immediately. But there are connections, and there are circles of other people on this planet who want the same outcomes. That connection starts to transform the space of the planet.

In my modified yoga classes, I prod everyone to stay focused, and not to let their mind wander. Projection of the future, is useless. We don’t have a future moment right now. We only have one moment to live at a time. It’s what is here and right now. Even myself, I have to bring my focus back, from any terrifying projection for the future, which I might have. Nothing has happened in the future. The past events have shown us, what can be. We have to make a choice, to take action in this present moment, to ensure, that the horrific events of the past can never happen again, without our awareness.

Inversion poses in yoga get blood to the brain, heart and lungs. It allows the brain to be cleared and stimulated. I would like to describe one pose that is really helpful, and is one of my personal favorites. Put your right foot forward, interlock your fingers behind you, or use a strap. Hold onto the straps by your hips. Tip yourself forward, and lift your arms up towards the sky. Lean your chest or stomach forward onto your front quad muscle. It’s challenging and requires focus, but when you rest your chest on your forward leg, it relieves a lot of stress in your shoulders, and brings blood to your head.

In a chair, tip your head forward and hold your strap on your back near the hips or interlock your fingers to lift up your arms. You can turn your body to the side if the chair is without arms. Then tip yourself forward to the side. That is one of the poses that help. Modified yoga offers gentle stretching, strength building and guided meditation to keep you in a present moment, where you can connect, take action, or stay calm and focused.

Here we go again. Time for another national election to choose a new Congress and a new president. The feeling in the air is that this election is more urgent and consequential than our garden variety face-offs, particularly at the presidential level. If this choice of president is viewed as fundamentally determinative of the direction the country will proceed, as both Republicans and Democrats are claiming, then great attention will be paid and hopefully significant participation realized, which together should lead to a substantive and declarative outcome-like it or not.

Typically, “It’s the economy, stupid!”. This time the sense is, “It’s the culture, stupid!”. Without getting into the developmental concerns related to our civilization’s maturation or lack thereof, economic claims, projections, and promises will likely continue to drive much of the partisan discussion. Are we Americans going to orient ourselves toward the past in an attempt to retain economic successes driven by tried and true practices previously delivered by legacy-styled business operatives or are we instead going to innovate and design for a paradigm-shifting economic future characterized by increasing competition, transformation, and multiculturalism? The decision we make will have consequences for the vitality of the economy going forward and for the employment it will spawn.

Conventional wisdom states that if the economy is sufficiently robust, then vigorous employment will take care of itself. Indeed, high employment levels are intrinsic to a strong economy. Widespread employment matters. So it’s worth examining the economic approaches both parties are offering to see who is most prepared to fashion a jobs-rich environment over the next four years. Here is my broad summary of the selection before us.

Donald Trump has shown us his economic priorities through past performance, which included low unemployment rates. Given that Republicans didn’t present a party platform this year we have to assume they are thinking ‘steady as she goes’. The Trump administration’s economic focus has been on individual and corporate tax cuts, deregulation targeted primarily to the energy and financial sectors, trade protectionism, immigration restriction, and rejection of a federal role in providing universal healthcare. In recent months there have also been attempts to resurrect the economy from the devastation of the Covid-19 pandemic by promoting a reopening or ‘get back to normal’ agenda.

Joe Biden, despite pressure for the Democratic Party’s left flank, is not proposing sweeping or revolutionary changes to the economy, but does advance ambitious federal interventions nevertheless. Principally, he is centered on reinvigorating America’s middle class by encouraging greater inclusivity across lines of race and levels of education with less income inequality and a reclamation of optimism born of opportunity. He wants to expand Obamacare, impose a more progressive tax code, eliminate middle class student debt, raise the federal minimum wage, encourage low-carbon manufacturing, combat climate change, and much more. Biden/Harris also have a 7-point detailed plan to defeat Covid and plan for future such threats.

Both the incumbent and the challenger want full employment. Which ideology is likely to produce this universally desired outcome? Excluding all other factors, which will influence who gets my vote, I see the following as salient with regards to employment.

The past 150 years has generated great economic advancements resulting in profound improvements in the lives of many millions, both as consumers and as producers. We’ve learned a lot about how to engender wealth and to provide life enhancing products and services. There are lessons from the past worth carrying on, but the past is gone. What we have to look forward to is the future with all of its uncertainty and ambiguity. Meeting this challenge requires a mindset that sees more opportunity than threat from the future. I think it is this frame of mind that impresses me more than tactics and positions. Durable, but resilient employment will best come from an outlook that sees the world as it really is and enthusiastically leans into the contest.

Medicare’s Annual Enrollment Period (AEP), often referred to as Open Enrollment, begins October 15th each year.

Each year Medicare health and drug plans can make changes to cost (premiums), coverage provided as well as providers and pharmacies in their networks. And AEP is the period when millions of people with Medicare can generally change their Medicare health plans and prescription drug coverage for the following year.

The following are some tips to help consumers find the best plan options and costs.

Some 22 million individuals have coverage through a Medicare Advantage plan. That’s roughly a third of the total Medicare eligible population. In some states like California and Oregon, as many as 40-to-42 percent of all Medicare eligibles have a Medicare Advantage plan. In Alaska, it’s only one percent and only three percent in Wyoming.

Today, many Medicare Advantage plans offer a zero plan cost and multiple additional benefits all of which sounds great. However, they may have a high deductible that can cost thousands of dollars should you have a hospital stay.

If you are choosing a Medicare Advantage plan or considering a switch during AEP, it is important to understand the complete package and potential costs you may face.

Some 15 million individuals have selected a Medicare Supplement insurance plan, also commonly called Medigap. These plans offer a variety of options, identified with alphabet letters, like A, C, G and N.

According to the American Association for Medicare Supplement Insurance’s 2020 Medicare Insurance Price Index there can be a wide variation for Medigap insurance prices. The AAMSI index is a valuable resource for consumers wanting to know the lowest and highest prices for nearly 100 leading cities across the U.S. Costs differences for Medigap Plan G, the most common choice among seniors turning age 65, can be significant. In Atlanta, just one of the cities cited, a 65-year-old woman might pay as little as $102-monthly or as much as $244-monthly for virtually identical Plan G insurance coverage.

Another important thing to know is that some plans offer household discounts. The potential savings can be as high as 14 percent. For those considering Medigap plan coverage, ask for the company’s history of premium rate increases. This can be a valuable indication of what one might expect down the road.

The Medicare.gov website is an outstanding resource for consumers. However, experts note that it can be overwhelming to navigate and there are some important things the government doesn’t tell you. The AAMSI website contains 18 things every consumer should know that the Medicare.gov website might not clearly explain.

Some of the best sources of information are local insurance agents who specialize in helping seniors compare plan options and prices. Betters ones will know which health and medical professionals participate in the various programs and what fellow area residents have to say about the particular plan.

A directory of Medicare insurance agents can be accessed online. Unlike other websites that are looking to gather your information for future marketing, this directory is available free of charge and completely private to use.

Medicare’s annual AEP lasts only a few weeks, concluding on December 7th. With some 61 million Americans on Medicare, it is important to act early during the time period. Waiting could be a costly mistake.