Wealth Strategies Journal

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Month: June 2017 (page 1 of 4)

IRS Issues Final Regs on Streamlined Exempt Org Application Process

The Treasury Department has released final regulations (T.D. 9819) for the streamlined process of applying for recognition of section 501(c)(3) status.  The  regulations finalize regs originally proposed in July 2014 and remove corresponding temporary regulations. They allow the Commissioner to adopt a streamlined application process for eligible organizations to apply … Continue reading

Governor Rick Scott Vetoes Florida Electronic Wills Act

Juan C. Antunez, on his blog, Florida Probate & Trust Litigation Blog, has reported that Florida Governor Rick Scott has vetoed the Florida Electronic Wills Act.   Mr. Antunez’s post, along with links to policy arguments for and against the proposed legislation and the Governor’s letter explaining his reasons for … Continue reading

Trustee Liability in a Multi-Participant Trust, by Rose K. Wilson

Rose K. Wilson, of Buchanan Ingersoll, has written a white paper, which examines whether it is possible to protect trustees against claims of breach of fiduciary duty by designating other persons to perform certain fiduciary functions.

Her paper notes that the practice of dividing a trustee’s traditional responsibilities among different … Continue reading

Fakiris v. Commissioner: Charitable Deduction Denied Where Control Retained

In Fakiris v. Commissioner, T.C. Memo. 2017-126 (June 28, 2017),The Tax Court held that a taxpayer and real estate owner/developer was not entitled to a charitable contribution deduction for a gift of real estate because he retained dominion and control over the real property he had contributed by retaining a … Continue reading

Fann v. Commissioner: Early IRA Distribution Subject to 10% Tax But Not Accuracy Related Penalty

The Tax Court, in Fann v. Commissioner, T.C. Summary Opinion 2017-43 (June 28, 2017),  considered the following issues:

  1. whether for 2012 any portion of petitioners’ distribution from an individual retirement account is excepted from the 10% additional tax imposed by section 72(t) for early withdrawal and
  2. whether petitioners are liable
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S.1318, The Retirement Security Act of 2017 introduced by Sen. Susan Collins Would Modify Safe Harbor Requirements for Automatic Contributions and Allow Saver Credit on 1040-EZ

Susan M. Collins, R. Main, has introduced S.1383, The Retirement Security Act of 2017, which would modify safe harbor requirements for automatic contribution arrangements, allow taxpayers to claim the savers credit on Form 1040-EZ, and reform other retirement savings incentives.

“The bill aims to reduce the $7.7 trillion gap the Center

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Gans + Blattmachr: FLPs + 2036: Not Such a Good Fit – Examination of Powell Tax Court Decision

Mitchell Gans & Jonathan G. Blattmachr have made available for download their forthcoming ACTEC Journal article, “Family Limited Partnerships and Section 2036: Not Such a Good Fit.” The abstract is as follows:

The IRS has struggled to close down abusive family limited partnerships. At first unreceptive to IRS arguments, the

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Wells Fargo v. Militello: Court Reviews Damages For Mental Anguish, Exemplary Damages, and Other Categories For A Trustee’s Breach Of Fiduciary Duty

David Fowler Johnson, of Winstead, reports on Wells Fargo v. Militello, where a Texas court reviewed damaged for mental anguish, expemlary damages, and other categories for a trustee’s breach of fiduciary duty.

Mr. Fowler’s summary begins as follows:

In Wells Fargo v. Militello, a trustee appealed a judgment from a

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Raymond McGaugh v. Commissioner: IRA Stock Purchase Wasn’t Taxable Distribution (7th Circuit)

The Seventh Circuit, in Raymond McGaugh v. Commissioner, has affirmed the Tax Court and held that an individual did not receive a taxable IRA distribution  when he instructed the IRA custodian to transfer funds to a corporation to purchase stock, finding that the individual didn’t have actual or constructive receipt … Continue reading

Brookings Institution Report: Abuse of tax deductions for charitable donations of conservation lands are on the rise 

The Brookings Institute has issued a report authored by Adam Looney, which asserts that abuse of charitable donations of conservation lands is increasing.  Mr. Looney’s report begins as follows:

Abuse of a tax deduction intended to encourage conservation of environmentally important land and historic buildings has cheated the government out

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Commentary Omnibus.2017.06.28: Bulletproofing Estate Plans, Multigenerational Businesses, Picking Winning VC Investments, Stay in Love By Hiring a Lawyer & More

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Charitable IRA Initiative + Conrad Teitell Request Charitable IRA Be Included in Tax Reform

Tax Notes reports that, in response to a June letter by Senate Finance Committee Chair Orrin G. Hatch, R-Utah, requesting tax reform input, the Charitable IRA Initiative asked that the language of H.R. 1337 be included in the committee’s tax reform legislation.

See analysis of legislation prepared by Charitable IRA’s Continue reading

IRS Warns of New Phishing Email Targeting Tax Pros

The IRS released the following press release warning tax professionals of a phishing email campaign targeting such tax professionals. The press release reads as follows:


The IRS, state tax agencies and the tax industry today warned tax professionals to beware of phishing emails purporting to be from a tax

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PLR 201725008: Ruling Re Matching Gifts by Private Foundation Matching Gifts of Employees of Corp That is Foundation’s Sole Contributor

The IRS made the following rulings with respect to donations made by a private foundation to match those made by employees of a corporation that is the foundation’s sole contributor:

  1. The donations that Foundation makes pursuant to its matching donation programs will not constitute self-dealing under section 4941.
  2. The donations
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PLR 201725022: C Corp Rental Income Not Passive

In PLR 201725022, the Service ruled that rental income from operations received by a C corporation, which intends to elect S Corp status is not passive investment income under Code Sec. 1362(d)(3)(C)(i).

See PLR 201725022 by clicking here.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.… Continue reading

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