Scott Martin has posted an article on The Trust Advisor Blog discussing an Alaska Bankruptcy Court's decision in Battley v. Mortensen regarding domestic asset protection trusts. In Mortensen, Mortensen transferred property to a self-settled domestic asset protection trust in 2005....
Continue reading "Alaska Bankruptcy Court Invalidates Domestic Asset Protection Trusts"
The Redding Record Searchlight has published an article by Vince D'Amato providing advice on how adult children can work together to provide care for their aging parents. The article provides advice ranging from the best time to discuss aging parent...
Continue reading "Children Can Work Together to Help Aging Parents"
The IRS has ruled on the tax status of a private foundation's scholarships under Code Section 4945. Specifically, the IRS held that the scholarships for students and teachers are not taxable expenditures. The IRS also ruled that the foundation's...
As Senators return to work on Monday, Democrats will continue their push to pass a Millionaire's tax. Democrats claim the tax is necessary to create desperately needed jobs. Those to be affected by the proposed tax increase are divided...
Continue reading "Economic Times Leave Millionaires Split on "Millionaire's Tax" Proposal"
The federal estate tax portability exemption is described by many attorneys as possessing more burdens than benefits. The short term, non-automatic tax exemption enacted by Congress in December of 2010, is set to expire at the end of 2012....
Karen Hube has written "GOP Hopefuls' tax plans don't give average Americans anything to be happy about" for the Washington times. The article describes the tax plans of the three main Republican presidential hopefuls; Herman Cain, Rick Perry, and Mitt...
Continue reading "Average Americans Wouldn't Benefit from GOP Front-Runners' Tax Plans"
Tax Notes has published three articles on the current state of tax reform. The first article by Diane Rogers analyzes the mostly disappointing proposals (in substantially reducing the deficit) that the Supercommittee has received. The second article by Bruce Bartlett...
Bill Roberts at the Aspen Family Business Group provides a useful checklist of characteristic to consider when choosing a trustee. The checklist can be accessed here. See Bill Roberts, "Selection Of a Trustee...A Search for Wisdom," http://aspenfamilybusiness.com/en/selection-of-a-trustee....a-search-for-wisdom.html By Derek Young,...
Continue reading "A Checklist of Characteristics to Consider When Selecting a Trustee"
In a recent article, George S. Jackson, tax professor at Elizabeth City State University, argues that the passive activity limitations of section 469 should be repealed because they are counterproductive. The full article can be accessed at Tax Analysts. See...
According to Michael Caballero, Treasury international tax counsel, the Treasury plans to issue final instructions for Form 8939, the FBAR. Additionally, Caballero, who was speaking at the New York University School of Continuing and Professional Studies annual Institute on Federal...
Continue reading "Treasury Official States New Tax FBAR Rules Expected By Year's End"
The public demand for job creation has fueled electorate support for pro-growth tax policies. Many are looking to the plans and commitments of leading 2012 GOP candidates to reform the American tax structure in ways that would promote an...
The Joint Committee on Deficit Reduction (also known as the Super Committee) is charged with reducing the current deficit by $1.5 trillion by both cutting the budget and raising revenue. One plan that some speculate the committee will implement is...
Continue reading "Super Committee May Target Gift Tax For Deficit Reduction"
The IRS has released Publication 4895 to assist executors with acquired property from a decedent that died in 2010 for which a Section 1022 election was made, and to describe the effects of the Section 1022 election. This election allows...
With the federal estate, gift, and generation-skipping exclusion amounts all unified at $5 million for 2011, high-asset families should consider strategic gifting now before the exclusion amounts are scheduled to decrease after 2012 - unless Congress intervenes. Families in New Jersey...
Continue reading "New Jersey Estate Planning Considerations"
According to Metlife and Caring.com, 25 percent of adult children nationwide are spending money on their parent's care with 32 percent of those adult children spending $5000 annually for their parents' expenses. According to elder law lawyers and financial planners,...
Continue reading "Ways to Financially Support Aging Parents"
The IRS has announced that Victor Song, the top official of the Criminal Investigation (CI) division is retiring and will leave his post on December 31, 2011. Mr. Song's departure comes at the time where CI has become an active part...
Continue reading "Criminal Division Chief of IRS Retiring at End of Year"
Chicago Mag has published an article by Whet Moser discussing the correlation between Illinois's state budget, lack of estate tax in 2010, and proposed tax breaks for CME Group Inc. and CBOE Holdings. According to the article, Illinois's estate tax...
Continue reading "The Cost of Illinois's Lack of an Estate Tax"
The ABA has published an article discussing cloud computing, which is the delivery of services and applications via the internet, and the risk of attorney liability for security breaches. According to the article, the potential for security breaches that expose...
The American Bar Association has published an article stating that law firm software use is on the decline. According to the article, knowledge management software and customer relationship management software use has steadily decreased. Among the factors contributing to the...
In an interview with Harvey Mackay, Dan Schawbel gets the founder and CEO of MackayMitchell Envelope Company to discuss his latest book. The interview discusses ways to be a great salesperson, make a difference in the world, and tips for finding...
PricewaterhouseCoopers LLP released their 2012 Guide to Tax and Wealth Management. A free online downloadable copy is available for the public to view. The guide addresses the changing landscape of wealth management and taxation. Some of the areas it examines are...
Continue reading "PwC Releases 2012 Guide to Tax and Wealth Management"
The carry-over basis analysis under the 2010 tax law has created a shift in how executors are valuing their assets. While individualized taxation analysis is still needed, there is a noticeable incentive to value assets higher under the 2010 tax...
Continue reading "Carry-Over Basis Creating New Asset Valuation Incentives"
On August 4, 2011, the American Bar Association released Formal Opinion 11-459 "Duty to Protect the Confidentiality of Email Communications with One's Client" and Formal Opinion 11-460 "Duty when Lawyer Receives Copies of a Third Party's E-mail Communications with Counsel."Opinion...
Continue reading "ABA Releases Opinions Regarding Attorney-Client Electronic Communications "
Tax Notes Today features an article analyzing a new report published by the American Family Business Foundation. The report reflects that repealing the federal estate tax would raise $362 billion in new revenue by 2021. Stephen Entin, a former Treasury...
Continue reading "Estate Tax Repeal Would Reduce Federal Deficit"
The ABA Section of Real Property Trust and Estates Law has published its bi-monthly October 2011 newsletter. Articles include the following:Turner v. Commissioner, T.C. Memo. 2011-209Self-Settled Trusts and Similar Devices Under the Bankruptcy CodeOne Tin Soldier: Estate Planning for Baby...
Continue reading "ABA Section of Real Property: Trust and Estate Law October 2011 Newsletter"
In two separate advisory emails the IRS has provided advice on Section 6166(g) Estate Tax Deferral. The first email advised that a change in the form of business that holds property would not qualify as a divestment of the...
Continue reading "IRS Provides Advice Emails on Section 6166(g) Estate Tax Deferral"
Robert Pear wrote "Top Earners Doubled Share of Nation's Income, Study Finds" for the New York times. Over the last three decades, the share of America's income from the top 1% has more than doubled. From 1979 to 2007, inflation-adjusted...
Continue reading "Doubled Share of Nation's Income from Top 1% of Earners "
The IRS has issued a public letter ruling determining that the income of a trust set up to pay retirement benefits to former state employees is excludable from gross income under section 115 of the tax code. The IRS determined...
Tax Notes Today features an article analyzing Republican presidential candidate Herman Cain's 999 plan for tax reform, which would replace current law with a 9 percent individual flat tax, 9 percent business flat tax, and a 9 percent sales tax....
The New York State Society of Certified Public Accountants has recommended further guidance to the IRS on electing portability for a deceased spouse's unused exclusion amount (DSUEA). The guidance focuses on a situation where a surviving spouse who received...
Continue reading "New York CPAs Recommend Guidance for Estate Portability Election"
The estate tax exclusion for 2012 will increase from it's current level of $5 million to $5.12 million. Under legislation passed in December 2010, the estate tax is indexed to inflation for the first time; yet if no further action...
Continue reading "Due to Inflation, Estate Tax Exclusion for 2012 Increased to $5.12 Million"
According to Forbes contributor Gene Marks, lawyers and other professionals will require less office space in the near future. In "Why Property Managers Have Panic In Their Eyes," Mr. Mark discusses the growth of cloud computing, which is the delivery...
The Georgia Supreme Court has held that a testator's mistress is entitled to proceeds from the sale of the testator's Florida condominium. In Melican v. Parker, the testator devised a condominium to his mistress. Prior to his death, however, the...
Continue reading "Testator's Long Time Mistress Entitled To Proceeds From Sale of Condominium"
The Idaho Supreme Court has held that an attorney did not breach his duty of care owed to a testamentary beneficiary when he drafted a will bequeathing beneficial interests in a trust a beneficiary when the testator had no interests...
SPONSORED POST___________________________________________________SCIN-GRATs: Combining a Bet-to-Live Technique with a Bet-to-Die Technique to Hedge Mortality RiskSome estate tax planning techniques work well when the client dies quickly. Others work better when the client lives longer. Is there a technique that works well...
The Wealth Strategies Journal has posted a new article entitled, "People on the Move: Israel's Tax System," by Alon Kaplan.From the article: "Israel has undergone major changes to its tax system over the past few years. The tax system was...
Carl Richards, CFP, has written "Kidding Ourselves About Our Financial Reality" for the NY Times. In the article, he describes how important it is to have a realistic starting place in charting a financial future. Speaking to this, he cites...
Continue reading "Importance of Realistic Self-Appraisal in Financial Planning"
The Eleventh Circuit, in an unpublished per curiam decision, affirmed a Tax Court decision that upheld an IRS decision to collect an estate's unpaid federal tax liability by levy. The Court held that the IRS did not abuse its discretion...
Recently thrust into the spotlight after Rick Perry proposed it in his economic growth package, a flat tax essentially simplifies the current tax code and creates a general tax rate for all. A flat-tax system would only tax money earned and when...
Continue reading "Potential Benefits and Detriments of a Flat Tax"
Tara Siegel Bernard at the NY Times has written "Retirement Plan Providers Can Now Offer Own Advice". Currently, providers need to hire an independent adviser to provide advice to potential clients. On December 27, 2011, the rules will change to...
Continue reading "Changes to ERISA Allow Retirement Plan Providers to Act as Advisers as Well"
Robert G. Nassau, director of the Low Income Taxpayer Clinic at Syracuse Law has written a funny alternate explanation for Bill Buckner's legendary boot in the 1986 World Series; the Red Sox first baseman may have been distracted by the...
Continue reading "Bill Buckner's Famous E-3 and Passive Loss Limitations"
Keeping the family house in the family after one's death is a time honored tradition. However, there is a tax liability one may face by placing their child on the title of the property rather than allowing them to inherit...
The First Circuit has applied a 40% Valuation for a "Son of BOSS Transaction" outlined in IRS Notice 2000-44. The transactions in the case involved placing both long and short options in a partnership to create an artificially high...
Continue reading "First Circuit Uses 40% Valuation Penalty for "Son of BOSS Transaction""
The IRS has proposed to withdraw a 2008 regulation that had included a partnership de minimis rule that did not look through partners with a less than 10% interest in the partnership. This change is being considered because the...
Continue reading "IRS Considering Withdrawal of 2008 Partnership De Minimis Rule Exception"
The IRS has released the 2011 edition of Publication 225, the Farmer's Tax Guide. Publication 225 is extensive; highlights include extensions of special depreciation allowances for certain qualified properties, a decrease in social security tax for self-employed people, and a...
Tax Notes reports professional responsibility news from the recent ABA Tax Section conference: The director of the IRS Office of Professional Responsibility said that when IRS Appeals grants a taxpayer a penalty abatement for reasonable reliance on the advice of...
The Senate Finance Committee held a hearing on October 18th to discuss tax reform in the context of charitable deductions and incentives for charitable donations. Both researchers and representatives of charitable organizations testified at the hearing. The topics discussed included...
Continue reading "Senate Finance Committee Holds Hearing on Charitable Deduction Reform"
According to Robert Half Legal, legal hiring is steadily increasing in law firms--but mostly of lawyers who have experience in litigation, health care, real estate, bankruptcy, corporate law and other hot practice areas. Meanwhile, corporations are also increasing their in-house-counsel...
Continue reading "Lawyers Gripe About How Difficult it is to Find Skilled Professionals"
In an October 18 Senate Finance Committee hearing, Independent Sector President Diana Aviv testified that "[n]ow is the time to increase charitable giving, not inhibit the incentives that have helped strengthen our communities." Ms. Aviv testified that U.S. nonprofits assist...
Continue reading "Independent Sector Advises Congress Not to Restrict Charitable Giving"
Revenue Ruling 2011-25 provides various prescribed rates for November 2011 for federal income tax purposes. These include the applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed...
The New York Times says "we have our heads in the sand about" current long-term care issues. The first of the three issues he discusses is that the Obama administration just announced it is scrapping the Class Act, its proposed government...
Continue reading "Current Issues Concerning Long-Term Care Insurance"
An AARP Bulletin recommends individuals and couples make an estate planning to-do list before estate tax and gift tax laws change in 2013. The list includes: seek professional estate planning advice, consider power of attorneys for health care and financial...
In 2012 taxpayers will be allowed to increase a 401(k) contribution to $17,000 - up from $16,500 in 2011. In addition, the estate tax exemption for 2012 will be increased to $5.12 million from $5 million. The IRS also announced other...
Kiplinger has an online tool that allows you to enter your adjusted gross income and find out in what percentage of the population your income- and corresponding tax burden- places you. The tool can be accessed here. By Derek Young, Associate Editor,...
Tax experts at Ernst & Young have advised their private company clients to pay close attention to potential tax changes that are just around the corner. Specifically, changes in the taxation of S corporations could lead to a tax...
Continue reading "Private Company Owners Should Be Prepared for Tax Changes by 2013"
For years 2010 through 2012 Canadians owning assets in the U.S. could be subject to U.S. estate taxes if the value of the assets exceeds $60,000. Colin MacAskill discusses certain strategies that Canadians could employ in limiting their U.S. estate...
Continue reading "How U.S. Estate Taxes Can Affect Canadians and How to Lessen the Impact"
A recent case in Alaska highlights a way that an asset protection trust could fail to protect against future creditors (even if the settlor was solvent at the time of trust creation). Applying a 2005 federal law which prevents bankruptcy abuse,...
Continue reading "How an Asset Protection Trust Could Fail to Protect Assets in Bankruptcy"
Ann Carns discusses how "[w]hether an appraisal is done for tax purposes, for an insurance policy or to divide property in a divorce, the most important first step is finding someone who has broad, deep knowledge about the kind of...
McGuireWoods.com features an article discussing recent cases concerning the liability trustees may face for investment losses. The article address several 2011 cases from both federal and various state courts.See Dana G. Fitzsimons, Jr. and Meghan L. Gehr, "Recent Cases of...
Continue reading "New Cases in Trustee Liability for Lost Investments"
Jan M. Rosen discusses how experts are advising clients to take advantage of tax breaks now that may expire in 2012 and 2013. The article also offer suggestionss including: engaging in bad debt reduction, where a person can write off...
Continue reading "Experts Advise to Take Advantage of Tax Breaks Now"
Trying to decide whether to withdraw funds from your Roth IRA or from your 401(k) is a bit like trying your hand at fortune telling. Making a determination of your future income potential and tax liability is a difficult task--but one...
Continue reading "Withdraw from the Roth IRA or the 401(k)?"
IRS Commissioner Douglas Shulman recently notified Congress that proposed spending cuts in the fiscal 2012 appropriations would require the IRS to reduce its enforcement staff and would lead to "a direct increase in the nation's deficit of about $4 billion"....
Continue reading "Proposed IRS Funding Cuts May Cause Enforcement Problems, Deficit to Increase"
Senator Johnny Isakson, R.-Ga., introduced S. 1656, the Hardship Outlays to Protect Mortgagee Equity (HOME) Act. The Act would allow for penalty-free retirement plan distributions in order to make mortgage payments on a principal residence, and it would modify the...
The QTIP trust may award certain income and property to one beneficiary while leaving a large tax burden on another beneficiary. As such, in certain scenarios, it is advisable to be careful in how one enters into a QTIP trust. Peter...
For 2011 and 2012, there is an increase in the lifetime gift exemption from $1 million to $5 million. This allows high net worth families to utilize various planning tools to exempt a greater amount of their wealth. However, there is...
IRS Chief Counsel has advised an agent to withdraw a summons made on an internet service provider for the e-mail content of a taxpayer. The Chief Counsel determined that the summons violated the Stored Communications Act. In order to obtain...
Forbes.com features an article discussing the advantages and disadvantages of several different types of proposed tax reform. The article discusses a flat tax, national sales tax, and a negative income tax. The author then suggests that the solution may lie...
Continue reading "The Pros and Cons of Various Tax Reform Options"
Senate Majority Leader Harry Reid has re-introduced a portion of the American Jobs Act that would be fully paid for by imposing a 0.5 percent surtax on taxpayers earning over $1 million a year. The bill would focus on...
Rep. Don Young of Alaska has proposed a new bill to provide a deduction for hunters that donate game meat to qualified charities. The bill would also provide an exemption to the processors for amounts paid by the charities to...
Continue reading "Bill Proposed to Provide Tax Breaks to Hunters"
The Chronicle of Philanthropy features an article discussing why the proposed limit on charitable deductions is no longer likely to be included in the Jobs Act. A counter-proposal in the Senate would utilize a 5.6 percent surtax on income over...
Continue reading "Charitable Deduction Limit No Longer in Jobs Act"
The Financial Planning Association has published it's weekly SmartBrief, which is a weekly digest of news and industry updates. Articles include the following:Top StoriesAre you really performing at your peak potential?A successful financial-planning career begins at homeAre your clients on...
Continue reading "Financial Planning Association's Weekly SmartBrief"
The sixth 2011 installment of the McGuireWoods Fiduciary Advisory Services circular lists several recent cases that concern the extent of the liability of a trustee for investment losses. These cases include:Figel v. Wells Fargo Bank, N.A., 2011 U.S. Dist. LEXIS...
Continue reading "McGuireWoods Fiduciary Advisory Services Circular"
The Tax Relief Act of 2010 provides a tax avoidance strategy for business owners to shift all or part of their business to their children. The Act provides a $5 million gift tax exemption ($10 million when combined with a...
The Tax Relief Act of 2010 provides a tax avoidance strategy for business owners to shift all or part of their business to their children. The Act provides a $5 million gift tax exemption ($10 million when combined with a...
The Wealth Strategies Journal has posted a new article entitled, "The SCIN-GRAT: Combining a Bet-to-Die Technique with Bet-to-Live Technique," by Steven J. Oshins, Esq.From the article: "Some estate planning techniques work better the shorter a person lives and others...
Continue reading "The SCIN-GRAT: Combining a Bet-to-die Technique with a Bet-to-live Technique"
SPONSORED POST___________________________________________________SCIN-GRATs: Combining a Bet-to-Live Technique with a Bet-to-Die Technique to Hedge Mortality RiskSome estate tax planning techniques work well when the client dies quickly. Others work better when the client lives longer. Is there a technique that works...
The recent downgrade of US debt coupled with slumping US financial markets has led many self-employed taxpayers and small business owners to look into the solo 401K alternative. Also known as the self directed 401K, this type of plan gives...
The IRS has issued guidance for filing a protective claim for refund of estate tax via Rev. Proc. 2011-48. The guidance provides details on who may file a claim, how the claim must be prepared and submitted, as well...
Continue reading "IRS Issues Guidance For Filing a Protective Claim For Refund of Estate Tax"
After the housing market crashed in 2008, the most prevalent question that housing market experts and economist have been asked is "is it better to rent or buy?" Economist at Capital Economics note that for the first time in three...
For estates in 2011 and 2012, practitioners should realize that an estate of the first spouse to die must affirmatively elect for portability. This can only be accomplished by filing Form 706 with the IRS. Estates should file the...
Continue reading "Preserving Portability: Practitioners Need to File Form 706 to Protect Clients"
Neil Harl, Professor Emeritus of economics and agricultural law at Iowa State University, discusses how people need to review their estate plans, especially in light of changes in federal tax law in 2011 and the recent rise in land values. ...
Karen Hube discusses ways for "non-rich" people to reduce estate taxes. She recommends piecemeal gifting, where every year a person can give away $13,000 to as many individuals as they like, tax-free. Ms. Hube also discusses intra-family loans, where assets...
In a FINRA arbitration statement of claim, the claimants sought damages arising from their investments in Fannie Mae ("FNMA") securities. The Arbitration Panel found that "[t]he recommended investment was suitable in every way except that the quantity of shares recommended...
Ron Lieber discusses a lawsuit filed in September 2011 against Ameriprise Financial by former and current employees alleging that Ameriprise added expensive, underperforming mutual funds, that came from the company's own investment management arm, to their 401(k). The article asks...
The IRS is auditing how Google avoided federal income taxes by shifting profits into offshore subsidiaries, which has allowed it to cut its tax liability by over $1 billion. In the second quarter, Google's effective tax rate was 18.8%, less than half...
Continue reading "IRS Audits Google's Offshore Profit Shifting"
The I.R.S. has advised tax practitioners to obtain e-file identification numbers now to prepare for new requirements in 2012. Beginning in January 2012, any paid tax professional preparing 11 or more Forms 1040 or 1041 will be required to e-file.See...
Continue reading "I.R.S. Advises Tax Professionals to Get E-Filing Identification Numbers"
Tax Notes Today features an article discussing the limit on the deductibility of tax-exempt municipal bonds proposed in the Jobs Act of 2011. Many panelists at National Association of Bond Lawyers' Bond Attorney Workshop agreed that the 28 percent cap...
Scott P. Borsack discusses how the future of the current estate and gift tax regime is far from certain. He points out that the President and the Democrats in the Congressional Super Committee have put out a position that...
Continue reading "Future of Current Estate and Gift Tax Benefits Far From Certain"
As of October 1, 2011, Florida law closely conforms to the UPOAA. For example: springing powers are prohibited, all powers must be durable, third parties must accept copies of the document, and an agent cannot delegate his or her...
Continue reading "Florida Law Now Closer to Uniform Power of Attorney Act (UPOAA)"
The Virginia State Bar has recently charged Richmond-based criminal defense attorney Horace Hunter for misconduct for his blog postings on Richmond Criminal Defense News. Other attorneys who blog should not worry as the Virginia State Bar is likely focusing in...
Continue reading "Virginia State Bar Crackdown on Lawyer's Blog"
Julius Giarmarco of Giarmarco, Mullins and Horton has provided the following notice of two presentations: "On August 10, 2011, Julius Giarmarco gave a presentation in San Diego before LIMRA (Life Insurance Marketing and Research Association) entitled, The Role of Life Insurance in...
Continue reading "Julius Giarmarco: Estate Planning and Business Succession Presentations"
The Labor Department defended its plan to expand the definition of "fiduciary" to cover people advising retirement accounts on a commission-fee basis. The central concern of the Department is that advisors will push financial products for which they receive a...
Alan S. Acker discusses how a settlor can retain a certain amount of control over a trust without incurring estate or gift tax inclusion. Specifically, when a trustee is limited by "ascertainable standards" for disbursements towards beneficiaries, estate tax inclusion...
The Tax Law RoundUp blog reviews three recent IRS victories in tax shelter cases. The first case, Southgate Master Fund LLC v. United States, involves foreign built-in tax losses. The second case, Pritired 1 LLC, et al v. United States, involves foreign tax credits. The...
The Fore Trust Software company has designed a software that incorporates directly into a firm's existing website. The Virtual Estate Planning System (VEPS) allows a client to directly enter in their information and answer questions regarding their preferences. Both the...
The IRS has proposed that the estate of a first spouse to die must file a timely and complete estate tax return (Form 706) in order to preserve any unused estate-and-gift-tax exemption (portability) for the second spouse. This procedure would force...
Continue reading "IRS Portability Proposal Would Force More Estates to File Estate Tax Returns"
A husband and wife contracted to sell their stock in a corporation to the corporation in exchange for monthly payments. In the event of the death of either, the payments would be made to the couple's heirs or assignees. After...
Continue reading "New York Court Decision Concerning Inter Vivos Gifts"
Lisa Chiu discusses an Urban Institute's Center on Nonprofits and Philanthropy study that found that President Obama's plan to limit charitable deductions for wealthy people would cost nonprofits at least $2.9-billion and perhaps as much as $5.6-billion dollars. The wide...
Continue reading "Study Shows Non-Profits Could Lose Billions Under Obama's Economic Plan"
The Wealth Strategies Journal has posted a new article entitled, "Recent Developments in Asset Protection Law - September 2011," by Jay Adkisson.In his article, Mr. Adkisson discusses new case law covering fraudulent transfers, veil piercing, exempt retirement plans, and offshore...
Continue reading "Recent Developments in Asset Protection Law - September 2011"
The Wall Street Journal Online features an article discussing John Malone's 2.2 million-acre U.S. real estate holding. Ted Turner had previously been the largest American landowner, holding just over 2 million acres of real estate. Malone, like Turner, made his...
Martin McMahon of the University of Florida has written "Now You See it, Now You Don't: The Comings and Goings of Disregarded Entities." The first part of the article discusses how tax law treats LLCs with different numbers of of...
Continue reading "Now You See it, Now You Don't: The Comings and Goings of Disregarded Entities"
On October 11th, Warren Buffett wrote a letter to Rep. Tim Huelskamp (R-Kan.) in response to the Congressman's call for Buffett to release his tax return. Buffett reiterated his previous offer to release his return simultaneously with the other 399...
Continue reading "Buffett Writes Letter in Response to Congressman"
McGuireWoods.com features an article discussing the final regulations issued on Form 990 for tax-exempt organizations. The final regulations are replacing the temporary regulations issued in 2008 and became effective on September 8, 2011. The article addresses the public support test,...
Continue reading "Final Regulations Issued for Form 990 for Tax-Exempt Organizations"
The I.R.S. is updating its Transcript Delivery System (TDS), with the new system taking effect on October 17, 2011. The new system will feature improved delivery times, increased capacity, and less maintenance downtime. TDS will be down on October 15...
Continue reading "I.R.S. Updating Transcript Delivery System"
The Trust Advisor Blog features an article about Steve Jobs' estate plan. The article says that numerous trust experts believe that Jobs' estate will likely not pay any estate tax, despite the current 35% estate tax rate. Records show that...
It's natural for a parent to admire certain qualities of one child over those of another. However, playing financial favorites between children or grandchildren may give off an unwanted impression and create emotional enmity between children. This is especially true if it is...
The First Circuit Court of Appeals has held than an IRS Regulation that prevents a second extension to file an estate tax return (after the three-year look-back period) without good cause was valid. The decedent had paid estate taxes...
New Hampshire has recently proposed an estate tax that will impose an 8 percent tax on all estates over $2 million that will be passed to anyone other than the spouse. This exposure to new taxation will likely drive the...
Continue reading "New Hampshire's Proposed Estate Tax Will Drive Wealthy Out of the State"
Len Burman of Forbes takes an intriguing look at the estate tax as a method that may help the fans of the Baltimore Orioles find a new owner some day. The analysis looks at the situation happening with the passing...
Continue reading "Can the Estate Tax Help the Baltimore Orioles Fans?"
The article discusses the potential usefulness of purchasing survivorship term insurance (second-to-die) as opposed to regular survivorship permanent (life) insurance. Traditionally, some families have purchased survivorship life insurance to help pay off an estimated estate tax bill after death. Yet, with the future...
Continue reading "Survivorship Term Insurance for an Uncertain Estate Tax Future"
Despite passing civil-union legislation into law to protect the rights of gay couples, Rhode Island law still precludes the state estate tax exemption from applying towards gay spouses. The state's estate tax currently applies when an estate exceeds $859,350,...
Continue reading "Gay Spouses Still Excluded From State Estate Tax Exemption in Rhode Island "
Kerry A. Dolan at Forbes has written "More than 2% of U.S. Billionaires Would Pay Higher Taxes" in which she claims that a recent Salon.com poll indicating that only 8 of the Forbes 400 would pay higher taxes based on Warren...
Emily Driscoll discusses how families can use a "family trust" to pay for college. Like a custodial account, a trust can transfer assets from the parent's tax bracket to a child's tax rate. The family trust also offers advantages such...
Continue reading "Creating a "Family Trust" to Pay for College"
Under the Unified Theory of Capital Management, there are two forms of capital - financial capital and human capital. Entrepreneurs love to focus on things that they control so they will mostly gravitate towards enhancing their human capital through education,...
New bill to amend I.R.C. Section 170(b)(1)(A) to allow a deduction for charitable contributions to agricultural research. In order to benefit from this deduction the charitable organization would have to primarily conduct agricultural research as defined under Section 1404,...
Continue reading "Bill to Allow a Deduction for Charitable Contributions to Agricultural Research"
Forbes.com features an article discussing Steve Jobs's estate plan, which apparently included 2 living trusts that Jobs funded with real estate in 2009. The article discusses the advantages of using living trusts rather than a will to pass assets, primarily...
Continue reading "Steve Jobs Apparently Used Living Trusts in Estate Plan"
Forbes.com features an article discussing the case of Rose v. Commissioner in which the Tax Court allowed the taxpayer deductions for a vacation home that had not been built yet. The two issues discussed in the article were: 1. whether...
Continue reading "Taxpayer Allowed Deduction for "Under Construction" Vacation Home"
A "Crummey" Trust gets it's name from the case Crummey v. Commissioner. In a "Crummey" Trust, the grantor creates a trust where they deposit funds equivalent to the amount of a yearly gift exemption to pay for life insurance premiums...
The passing of Al Davis, the owner of the Oakland Raiders, could force the Davis family in the future to have to sell the team. The future estate tax on the appreciation in value of the Oakland Raiders may make...
Continue reading "Estate Tax Could Force NFL Team Ownership Change"
The IRS has issued Field Attorney Advice for a business attempting to deduct contributions of food inventory under I.R.C. Section 170. The memo concludes that the business is not entitled to a deduction because of its failure to properly...
Continue reading "IRS Denies Deduction For Food Inventory Donation Without Proper Form Submission "
Arden Dale discusses how the IRS has failed to release a "cost-basis" form that is required to estimate future capital gains on an estate. The form is required because Congress gave 2010 estates a one-time choice to opt out...
Continue reading "Cost-Basis Form For 2010 Estates Still Not Available From IRS"
With several devastating and highly unpredictable events occurring this year, many market forecasters struggled in making the correct calls. Investors who made conservative bets did the best while the ones that made risky moves took in the most loses. With France and...
In order for a taxpayer to be entitled to an inventory deduction under I.R.C. Section 170, the taxpayer must file form 8283. If no such form is filed on the required date, the taxpayer must show a good faith...
Steven Schneider discusses three recent IRS victories in cases concerning tax shelters involving importing foreign built-in tax losses, foreign tax credits, and generating tax losses from "underwater" commercial leases. In Southgate Master Fund LLC v. US, the Fiifth Circuit Court...
Tax Notes International features an article discussing whether the U.S. estate tax is properly applied to nonresident aliens. The article suggests that the estate tax is unfairly applied to the nonresident aliens and needs to be changed. The article also...
Continue reading "Is the U.S. Estate Tax Properly Applied to Nonresident Aliens?"
A celebrity's career may not end at death. Mark Roesler is a pioneer in the legal field of representing deceased celebrities and says that product endorsements are still plentiful even if the celebrity has already passed away. Some of Roesler's...
In analyzing investments in a tough market economy, it is important not to overlook certain tax benefit strategies. Morningstar lists five tax saving methods that should be considered, including examining cost-basis records, IRA conversion, and looking into gifting securities. See,...
The IRS has proposed new regulations that would require paid tax return preparers to file a due diligence checklist, Form 8867, when filing any federal tax return claiming the EITC. The EITC benefits low and moderate income workers and can be...
Continue reading "IRS Announces Proposed Regulations For Earned Income Tax Credit (EITC) Claims"
Distributions to charitable and non-charitable beneficiaries can be made through split-interest trusts. Data newly released at the IRS.gov web page explains the tax impacts of each of the four types of split-interest trusts defined by their method and timing of...
Continue reading "IRS Releases Statistics for Split-Interest Trusts and Annual Required Form 5227"
Riskalyze is a new financial site aimed at helping investors select an investment portfolio that is in tune with their tolerances for risk. The website suggests a list of investments and takes the investor through multiple steps to decide how...
The Wills, Trusts and Estates Prof Blog posted recently about Caregiver Village. Caregiver Village is an online social network site dedicated for caregivers and the problems that they may face on a daily basis. The site gives caregivers an an...
Forbes.com features an article discussing tax policy and "The Buffett Rule," which has become the popular term for the plan to increase taxes on the ultra-wealthy. The article discusses previous instances in history when putting a face to tax policy...
Continue reading "Using Wealthy Individuals to Put a Face to Tax Reform"
The Senate Finance Committee is holding a hearing today to address tax reform in the context of tax incentives for home ownership. In conjunction with the hearing, the Joint Committee on Taxation has released a related paper, "Present Law, Data,...
Continue reading "Senate Finance Committee Holds Hearing on Tax Incentives for Homeownership"
Forbes lists five reasons why individuals should not create joint ownership between generations. Some of the five reasons include bankruptcy, divorce filings, and family fighting. The authors go on to illustrate their points with examples. See "Top 5 Reasons To...
Continue reading "Five Reasons To Not Create Joint Ownership Between Generations"
In Wallace v. I.R.S., the U.S. District Court for the Southern District of California held that the statute of limitations for a claim to quiet title on property in an estate does not begin running until the estate tax is...
Tax Prof Blog discusses a type of U.S. tax evasion where U.S. citizens hide money in companies located in offshore tax havens and then use that source of money to invest in U.S. equity and debt securities. Thus, a proportion of...
Continue reading "U.S. Tax Evasion Drives Foreign Investment - In the U.S."
In an interview with a radio station in Hartford, Connecticut State Senator Scott Frantz, a tax expert, opined that the new Connecticut estate tax was driving residents from the state and is counterproductive to the effort to create jobs and...
Continue reading "Is the Connecticut Estate Tax Counterproductive to Economic Growth?"
According to a poll from Harrison Group and American Express Publishing, 73% of families making $100,000 dollars or more support raising taxes on those making $1 million a year. Jim Taylor of Harrison Group opines that the affluent support higher...
Continue reading "Affluent Americans Support Higher Taxes for the Rich"
Reuters features an article about Holy Smoke LLC, a new company that puts cremated ashes into bullets and shotgun shells. For about $850, Holy Smoke will fill 250 shotgun shells or bullet casings with ashes. So far Holy Smoke has...
Continue reading "New Company Puts Cremated Ashes into Bullets"
In Rose v. Commissioner, the Tax Court allowed a couple to deduct interest payments made on the mortgage for vacation property, although no house stood on the property. For interest to be deductible under section 163(a), it must be qualified...
Continue reading "Tax Court Allows Mortgage Interest Deduction Without House"
To be an effective speaker, you need to use that is language crisp, clear, and resonates with the audience. Delivery needs to be unique and reflect your personality. Claudio Pannunzio lists four guidelines for being a more effective speaker: (1)...
Continue reading "Four Ways Financial Planners Can Improve Their Presentation Skills"
In Tax Notes, Eric Kroh reveals that the number of estate tax returns filed in 2010 dropped 55% from 2009. The returns filed in 2010 mostly applied to decedents who passed away in 2009 when the estate tax exclusion...
Continue reading "Number of Estate Tax Returns Down Over Fifty Percent in 2010"
In the current compliance-filled world, many people are reluctant to take a strong stance on a particular side. Hanging on the fence is not favored by the interviewers who want concrete answers. In her article, Kristin Harad lists out situations...
Attorney Frederick M. Cuppy and his client Peter G. Rogan are accused of obstructing collection efforts concerning $188 million dollars in proceeds from the closure of Edgewater Hospital. In 1996, Rogan created an offshore trust in the Bahamas to protect...
Continue reading "Perjury and Obstruction Charges for Post-Claim Asset Protection"
William Atkinson writes that it is imperative for financial advisors to weed out potential "clients from hell" to avoid abuse and other issues. He provides a lengthy list of behaviors that are red flags for a potentially troublesome client. He...
Anonymous, an internet-activist group that has caused trouble with blunt-force takedowns of websites, has recently declared "war" on the New York Stock Exchange. To support the Occupy Wall Street protest, Anonymous threatens that it will erase the NYSE from the...
Continue reading "Anonymous Vows to Erase NYSE from the Internet on October 10"
WTAS has published its October 2011 newsletter. Articles include the following: Business or Pleasure? The Red Flag Deductions of the Entertainment Industry Marketability Discounts Prove Critical Factors in Appraisal Standing Strong: Investing in Today's Volatile Market Form Over Substance: New...
Draft instructions for Form 8938 have been released and can be viewed at the Tax Analysts website. This form deals with the specification of foreign financial assets. The instructions include a transition rule that permit some taxpayers to defer filing...
Continue reading "Draft Instructions for FATCA Form 8938 Released by IRS"
In Friedberg v. Commissioner, the Tax Court held that the taxpayers were not entitled to a deduction for their charitable contribution of a facade easement on their home. The taxpayers lived in a historic district of New York City and...
Continue reading "Tax Court Denies Deduction for Facade Easement"
In a recent U.S. Tax Court Memorandum decision, Judge Wherry held that petitioner was entitled to deduct a short-term capital loss based on inability to collect from his business partners on a judgment and to increase his basis in real...
Continue reading "Tax Court Permits Capital Loss, Basis Increase For Real Property"
Carl Richards in the New York Times writes about the importance of earnestly discussing money and finances with your spouse early on. He notes that at first money often seems to be one of the last things talked about in...
Continue reading "Discuss Money With Your Spouse Before It Is Too Late"
The Journal of Financial Planning features an article about developing an estate plan with your parents. The article emphasizes planning ahead and suggests the appropriate steps to take when developing a plan. The article also provides tips for how children...
In Tax Notes, Lee Shepard writes about difficulties with the implementation of FATCA. The program deputizes foreign banks and other agencies to help prevent tax evasion by U.S. citizens. The article also summarizes how FATCA came into existence, and it proposes...
Continue reading "Alternatives to the Foreign Account Tax Compliance Act (FATCA)"
Persistent economic turmoil and current fears over the Greek default has forced several wealthy families to move at least $1 trillion into checking accounts in the USA. This has created a huge cash reserve increase for US banks. Branch managers are...
Continue reading "Wealthy Say Money is Safer in the US Than Europe"
Paul Sullivan at the New York Times has written "Challenging Dollar-Cost Averaging and Other Bad Ideas". The article emphasizes caution, conservatism, and consistency in current investments. Key criteria mentioned for stock choices are amount of cash holdings and consistency of...
Continue reading "Strategies for Recession-Panicked Investors"
A CPA tells the New York Times about her fear of public speaking, and how she's been working on it. Much practice and speaking "from her heart," and not from prepared notes, are her keys to improvement.See Dominique Molina, "Conquering...
Continue reading "Reflections on Public Speaking from a CPA"
Bequests are charitable gifts made at an individual's death--a planning option that is frequently overlooked. Fewer than 9.5% of Americans older than 50 who donated over $500 a year between 1995 and 2006 planned to make a bequest. The article...
Edward Lotterman discusses "the wealth effect" and how it affects the psychology and consumption of a typical person. Mr. Lotterman also asserts that the current step-upin-basis rules lead to inefficient uses of property, cause lots of money to escape taxation,...
Continue reading "The Wealth Effect And The Inefficiency of Step Up in Basis"
Forbes discusses the 9th Circuit decision in Estate of Petter v. Commissioner, which held that an estate was entitled to a charitable deduction equal to the value of certain organization shares that charitable foundations initially received, and also was entitled to a charitable deduction...
Continue reading "Do Appraisals As Contemporaneous to a Transaction As Possible"
In early May of this year the Connecticut legislature decreased the state's estate tax exclusion amount from $3.5 million to $2 million. The family of Monty Blakeman, who died in April 2011, is suing the state over the fairness of...
Continue reading "Connecticut Sued Over Retroactive Estate Tax Increase"
A Wall Street Journal article discusses how lower interest rates can help reduce taxes. The article discusses various ways to take advantage of the IRS's lower rates: make a loan to a family member; do an installment sale; set up...
Forbes.com features an interview with Joe Hurley of SavingforCollege.com on 529 college savings plans. Mr. Hurley regards 529 plans as the best investment vehicle for parents or grandparents to save for their children's college, although he feels they can often...
Continue reading "Saving for College Using 529 College Savings Plans"
Lori Brillhart provides some end of year tax planning tips. To reduce your taxable estate, she reminds taxpayers to make gifts of $13,000 (or $26,000 per married couple). Such a gift to an individual does not require an annual...
In the opening meeting of the Estate and Financial Planning Council of Central New Jersey on September 7, Stacey Crowell Maiden, Esq., spoke about court procedures involved if a client's diminished capacity prevents effective representation of the client. Ms. Maiden...
The ABA publication Probate & Property features an article discussing the practice of basis harvesting to reduce income tax liability. The article uses as the basis for its argument the formula marital deduction provisions that allow surviving spouses to avoid estate...
