Taxation & Estate Planning

A Co-Maker of a Promissory Note Is Not Always Liable to the Co-Signer [Florida]

Posted on October 31, 2020
In an interesting case, two doctors co-signed a promissory note with others of an LLC where they were members, and that was their employer, payable to a bank. They later left the practice, and the LLC sought to collect from them their share of the liability to the bank...

Fantasy Sports Is Not a Game of Skill

Posted on October 27, 2020
Fantasy sports generally involve selecting team members and then earning points when the selected team players compete in real-world sports events - the players with the highest points win. Such games often require an entry fee and pay cash or other prizes to the winners...

Applicable Federal Rates - November 2020

Posted on October 25, 2020
For the applicable federal rates for the above month, preceding months, and a data table that visually shows trends, click here! Direction of rates: mostly flat.Follow @crubincrubin !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d...

Florida Irrevocable Trust Amendment Mechanisms

Posted on September 27, 2020
 For many years, we have published a diagram that lists and provides information on the mechanisms under Florida law available to modify irrevocable trusts, both judicially and non-judicially. There have been 1000+ downloads of the diagram, attesting to the interest in this topic and how often people want to amend an irrevocable trust...

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New Case on Loan vs. Gift

Posted on September 23, 2020
 In a low-interest rate environment, loans by wealthy parents to children often makes sense from a planning perspective. If the recipient can invest the proceeds and earn more than the low interest rate charged, the net profit is effectively transferred without a taxable gift...

Applicable Federal Rates - October 2020

Posted on September 20, 2020
For the applicable federal rates for the above month, preceding months, and a data table that visually shows trends, click here. Follow @crubincrubin !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js...

Assignment of Homestead Insurance Proceeds Allowed

Posted on August 30, 2020
 In a recent case, an owner of homestead property assigned post-loss insurance benefits to a third-party contractor. The  insurance company challenged the assignment, asserting it was not allowed by Article X, section 4(c) of the Florida Constitution - apparently not an authorized alienation of a homestead interest by mortgage, sale or gift...

GRANTOR TRUSTS OWNING AN ANNUITY

Posted on August 09, 2020
  The income tax treatment of annuities is provided for under Code § 72. That section provides various rules, including extra income tax for some distributions to younger taxpayers and limits on deferral for entity  owners. The provisions can be difficult to interpret when the owner of the annuity is a grantor trust, and the annuitant and current beneficiary of the trust is not the grantor...

Applicable Federal Rates - August 2020

Posted on July 19, 2020
For the applicable federal rates for the above month, preceding months, and a data table that visually shows trends, click here.Follow @crubincrubin !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js...

FBAR NON-WILLFUL PENALTY NOT CALCULATED BASED ON NUMBER OF ACCOUNTS

Posted on July 05, 2020
The FBAR rules require the filing of a FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR) to report for accounts of U.S. persons aggregating $10,000 or more. For a non-willful failure to disclose, the maximum penalty imposed is $10,000...

Applicable Federal Rates - July 2020

Posted on June 30, 2020
For the applicable federal rates for the above month, preceding months, and a data table that visually shows trends, click here.Follow @crubincrubin !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js...

Formula Clauses Bolstered by Case That Rules Against the Taxpayer

Posted on June 20, 2020
Formula clauses are used when property with uncertain value is transferred by gift or sale. The objective is to set the amount that is transferred for gift tax purposes, even if the IRS later is successful in asserting that what was transferred was worth more than what was reported...

Court Retains Ability to Remove Trustee Regardless of the Terms of the Trust [Florida]

Posted on June 07, 2020
An irrevocable trust included provisions for the removal of a trustee by reason of the trustee's disability. A beneficiary brought an action to remove the trustee, but not based on the specific definition and removal provisions of the trust. Could the beneficiary use Trust Code provisions to remove the trustee when the trust instrument had different provisions? In a recent case, the trial court held that the terms of the trust required that removal could be based only on the terms of the trust...

NEW FLORIDA LEGISLATIVE PROVISIONS OF INTEREST TO THE ESTATE PLANNING COMMUNITY [FLORIDA]

Posted on May 26, 2020
A number of measures have cleared the Florida legislature that may be of interest. These are awaiting the signature of the Governor. It is likely that most, if not all of these will be signed into law. This is not an exhaustive list.  CS/HB 505.Precious metals, such as bullion or coins, are tangible personal property under the Probate Code...

Applicable Federal Rates - June 2020

Posted on May 25, 2020
For the applicable federal rates for the above month, preceding months, and a data table that visually shows trends, click here.Follow @crubincrubin !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js...

CORRECTION - Summary Table for Estate and Trust Deduction Limitations

Posted on May 20, 2020
When I posted the table on Sunday, the link went to a prior version of the table, not my final table. I have updated the link to the final version. The prior version's description of the treatment of NOL carryovers and capital loss carryovers was not correct...

Summary Table for Estate and Trust Deduction Limitations

Posted on May 17, 2020
In the 2017 Tax Cuts and Jobs Act, new Code §67(g) was added to prohibit individual taxpayers from claiming miscellaneous itemized deductions through 2026. Questions have arisen as to what deductions of non-grantor trusts and estates come under this provision, including deductions that carry out to beneficiaries in the year of termination of the estate or trust...

COVID-19 RELIEF FOR NONRESIDENTS

Posted on April 22, 2020
Nonresident alien individuals present in the U.S. for too many days in a calendar year may be classified as residents for federal income tax purposes under the substantial presence test. If such individuals are stuck in the U.S. due to medical conditions, those days of presence may be excluded in making the days computations pursuant to statutory provisions...

Surviving Spouse Homestead Limitations Struck Down as Unconstitutional [Florida]

Posted on April 18, 2020
Article VII, Section 6(f)(1) of the Florida Constitution provides ad valorem tax relief to surviving spouses of veterans who died from service-connected causes while on active duty. The provision specifically provides the relief to homestead property of:?[t]he surviving spouse of a veteran who died from service-connected causes while on active duty as a member of the United States Armed Forces...

IRS Provides Transfer Tax Extensions

Posted on April 12, 2020
Over the past few weeks, the IRS has provided numerous extensions due to the Covid-19 virus outrbreak. These included Notice 2020-17, Notice 2020-18, and Notice 2020-20. Some relief was provided for gift and generation-skipping transfer tax return filings and payments under Notice 2020-20...

A Short Summary of the Key Tax Provision of the CARES Act

Posted on April 06, 2020
Follow this link to our firm?s summary of the Act, which contains some unprecedent tax relief to address the economic harm arising from the Covid-19 crisis.Follow @crubincrubin !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d...

Procrastinators Rejoice - Income Tax Deadlines Extended to July 15, 2020

Posted on March 21, 2020
Recently, income tax return payment deadlines were extended under Notice 2020-17, subject to dollar limitations. This notice has now been superseded by Notice 2020-18. This Notice now extends both income tax payments due, as well as return filings due, on April 15 to July 15...

Coronavirus Update: 90 Day Extension to Pay Federal Taxes

Posted on March 17, 2020
In a press briefing, Treasury Secretary Steven Mnuchin announced that the April 15 due date for payment of federal income taxes has been pushed back 90 days. Individuals can defer up to $1 million of tax liability, and corporations can defer $10 million, without being subject to interest nor penalties for late filing...

Will the Income Tax Return Filing Deadline be Extended Due to the Coronavirus?

Posted on March 14, 2020
It seems likely. It would be unprecedented (to my knowledge) for there to be a national extension, but of course such extensions are regularly granted to regions afflicted by disasters from time to time.President Trump indicated last week that he was instructing Treasury to allow for deferral of tax payment deadlines, but what I have read on that only mentioned payments and not filing due dates...

Tax Court Rejects IRS Valuation Theory Aimed at Reducing Nonvoting Interest Discounts

Posted on March 07, 2020
In a recent Tax Court Memorandum decision, the taxpayer undertook two inter vivos gifting transactions - one to a GRAT, and one to an irrevocable trust. The latter was a part sale/part gift transaction. The transferred items were LLCs holding securities, limited partnership interests, and promissory notes...

Basis in a Life Insurance Policy

Posted on February 23, 2020
Life insurance contracts may be sold for many reasons, including among family members as circumstances change, between trusts when it is desired to move a policy out of an irrevocable trust to one that has more desirable terms (although oftentimes that is nontaxable if it is a sale between grantor trusts), or changes in business relationships and coverages...

Proportionate Means Proportionate

Posted on February 11, 2020
If a taxpayer contributes a conservation easement in land to a qualified organization, to obtain an income tax deduction the contribution must be in perpetuity. However, the law recognizes that sometimes the easement must be unwound (for example, if the land is taken by the government under eminent domain)...

New ?No Rule? Areas

Posted on February 01, 2020
Every year the IRS publishes a list of areas where the IRS will not issue a private letter ruling. Items on the list can provide a warning to taxpayers that the IRS may not agree with the conclusion that would be sought in the ?no rule? area.For 2020, the IRS added to the ?no rule? list or the ?will not ordinarily be issued? list:1...

SUMMARY TABLE OF TRANSFER TAX EXEMPTIONS, RATES, KEY CREDITS & BASIS ADJUSTMENTS

Posted on April 01, 2011
Trying to keep track of the various changes in the federal transfer tax exemptions, credits, rates, and basis adjustments that have occurred since 2001 and the enactment of EGTRA is becoming a difficult task. Below is a summary table I have created. If anyone sees any necessary corrections, please leave a comment and I will update it...

NEW FBAR FORM AND INSTRUCTIONS RELEASED

Posted on March 29, 2011
Earlier this month, we discussed here the new FinCEN regulations that revise the rules applicable to FBAR/Form TD F 90-22.1 filings. The Treasury Department has now issued a March 2011 revision to the FBAR form and instructions, which incorporate the new provisions of the regulations...

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