Taxation & Estate Planning

FDIC BANK INSURANCE ENHANCED COVERAGE EXTENDED THROUGH 2013

Posted on June 10, 2009
In October 2008, presumably to avoid a run on the banks as the credit crisis threatened a financial panic, the FDIC expanded its $100,000 insurance coverage on FDIC-insured institutions  to $250,000. This enhanced coverage was set to expire on December 31, 2009...

IRS CAN?T SEIZE RIGHTS TO FUTURE SEASON TICKETS, BUT TAXPAYER STILL A LOSER

Posted on June 07, 2009
In many cities, season tickets to sports franchises are unavailable for immediate purchase for newcomers. Instead, potential buyers are placed on waiting lists ? sometimes for many years ? until an existing season ticket holder fails to renew. As many will attest, for the diehard fan season ticket rights can be a precious asset...

INTEREST RATES FOR TAX OVERPAYMENTS AND UNDERPAYMENTS (JULY 2009 QUARTER)

Posted on May 31, 2009
The IRS has announced the interest rates for tax overpayments and underpayments for the calendar quarter beginning July 1, 2009. For noncorporate taxpayers, the rate for both underpayments and overpayments will be 4% (unchanged). For corporations, the overpayment rate will be 3% (unchanged)...

IRS PREVAILS IN COST SHARING CONTROVERSY

Posted on May 28, 2009
The 9th Circuit Court of Appeals reversed the Tax Court in an interesting case involving issues of Section 482 cost sharing, precepts of regulatory interpretation, and penalties. The Section 482 cost sharing issue related to the question whether compensation expenses of a U...

To access this complete feed in the blog feed reader login or register for free.

EXTREME CARE NEEDED WHEN USING QUALIFIED INTERMEDIARIES IN SECTION 1031 EXCHANGES

Posted on May 24, 2009
Section 1031 of the Internal Revenue Code allows taxpayers to exchange real property and other types of property for property of ?like-kind.? Since it is rare to find a buyer and seller with two properties that each is willing to exchange directly to the other, the Code allows for a deferred exchange where the seller sells his property, with the proceeds being used to buy a replacement property from a third party within certain time limits...

JUNE 2009 APPLICABLE FEDERAL RATES

Posted on May 21, 2009

HSA CONTRIBUTION LIMITS ARE BUMPED UP

Posted on May 17, 2009
HSAs (health savings accounts) are a useful tax benefit in this day and age of increasing medical insurance premium costs. As with most insurance coverages, a higher deductible allows for lower premium charges. However, the higher deductible leaves the insured with higher out-of-pocket medical costs...

USE OF QPRT ALLOWS SALE OF REMAINDER

Posted on May 14, 2009
In the good old days, a taxpayer that owned a piece of property could sell the remainder interest, retain a term or life estate, and adopt a position that (a) no gift occurs, per the sale of the remainder for fair market value, and (b) at the end of the term interest or the death of the taxpayer, no estate tax applies to the retained term interest or life estate (which expired at death)...

IRS PROVIDES MORE GUIDANCE ON UNREPORTED OFFSHORE INCOME

Posted on May 11, 2009
Last month, the IRS announced that it was adopting consistent guidelines for voluntary disclosure requests of taxpayers that relate to offshore undisclosed accounts and foreign entities. Disclosure issues would be settled, with the taxpayer being subject to the imposition of taxes and interest for the prior 6 years, with the taxpayer filing or amending all returns for that period, including required FBAR returns...

SALE OR SURRENDER OF LIFE INSURANCE CONTRACTS

Posted on May 07, 2009
In today?s difficult financial times, more taxpayers than usual are cashing in or selling their life insurance policies. A recent Revenue Ruling addresses the IRS? view of the income tax consequences of such transactions. The salient points are summarized below...

DOCUMENTARY STAMP TAX LOOPHOLE ABOUT TO BE CLOSED [FLORIDA]

Posted on May 03, 2009
Florida imposes documentary stamp taxes on the transfer of real property. Since the tax typically applies only to transfers of real property and not interests in corporations and LLC?s that own real property, one planning method to eliminate the tax is for the seller to first transfer the real property to an LLC, and then sell the LLC interests to the buyer, free of documentary stamp taxes...

HOMESTEAD & PROPERTY THE DECEDENT NEVER LIVED IN [FLORIDA]

Posted on April 30, 2009
Florida?s Constitution provisions in regard to homestead can at times override a disposition of real property that is otherwise provided for in a decedent?s estate planning documents. A recent Florida case illustrates a point that many not be aware of...

FOREIGN CORPORATION ESCAPES $1 MILLION EXECUTIVE COMPENSATION DEDUCTION LIMITS

Posted on April 26, 2009
Code Section 162(m) limits the deduction for compensation paid to certain highly paid employees of publicly held corporations to $1 million per year. A recent Private Letter Ruling addressed the applciation of this limitation to a foreign corporation whose American Depository Shares are publicly traded...

EMPLOYEE LEASING COMPANY OFFICER CAN BE RESPONSBILE FOR SECTION 6672 100% PENALTY

Posted on April 23, 2009
The U.S. looks very unfavorably on employee withholding taxes that are not paid over to the IRS. Code Section 6672 is an important tool in the IRS' compliance arsenal. Under Section 6672, an individual who is responsible for the collection of the taxes can be held liable for a 100% penalty if collected taxes are not paid over...

MAY 2009 APPLICABLE FEDERAL RATES

Posted on April 20, 2009

CLOSE PROXIMITY DOES NOT MEET WILL WITNESS REQUIREMENTS [FLORIDA]

Posted on April 16, 2009
For a Last Will to be valid in Florida, two witnesses must sign. Further, the two witnesses must sign in the testator?s and each other?s presence. A recent Florida court indicates that if a witness is merely close by when the the other witness and the testator signs the Last Will, that alone is not enough to meet the ?presence? requirement...

NOT ALL SHAREHOLDER LOANS CREATE BASIS IN S CORPORATION STOCK

Posted on April 12, 2009
Subject to other Code limitations, a stockholder of a Subchapter S corporation can deduct his or her pro rata share of losses of the corporation to the extent of basis in his or her shares or in any indebtedness of the S corporation to the shareholder...

RETURN EXTENSIONS CAN BE FILED ELECTRONICALLY

Posted on April 09, 2009
Federal income tax returns are due for most individuals this April 15th. Taxpayers who cannot complete their return by then can file for an automatic 6 month extension for filing. Historically, taxpayers (or their return preparers) prepared a Form 4868 to obtain the extension...

TAX COURT BENDS OVER BACKWARDS TO IMPOSE EQUITABLE APPORTIONMENT

Posted on April 05, 2009
Many states apportion estate taxes among beneficiaries of an estate and revocable trusts in proportion to the assets received by them that are subject to estate taxes, absent contrary language in the dispositive instruments. This is known as ?equitable apportionment...

IRS AMNESTY FOR UNDISCLOSED OFFSHORE ACCOUNTS AND ENTITIES

Posted on April 02, 2009
The Internal Revenue Service ("IRS") recently announced a framework for resolving cases involving previously undisclosed foreign entities and offshore accounts held by or for the benefit of U.S. persons. The protocol set forth by the IRS will remain available to taxpayers up until September 23, 2009, unless sooner extended...

SO HOW HIGH CAN WE ANTICIPATE INCOME TAX RATES GOING?

Posted on March 21, 2009
You would have to be living under a rock these days to be unaware of the massive spending coming out of Washington D.C. these days. The Associated Press reported today that President Obama's deficit estimates may be significantly lower than reality. As reported in today's Ft...

APPLICABLE FEDERAL RATES ? APRIL 2009

Posted on March 19, 2009

IRS ALLOWS APPLICATION OF LIKE-KIND EXCHANGE RULES TO TRADEMARKS AND TRADE NAMES

Posted on March 15, 2009
In my September 28, 2008 posting, I discussed a 2006 technical advice memorandum (TAM 200602034) that extensively analyzed various Section 1031 issues, including like-kind exchanges of trademarks and trade names. That TAM provided that trademarks and trade names could not be exchanged tax-free under Section 1031 since they were too close akin to goodwill and going concern value, two items which cannot make use of the like-kind exchange rules...

INTEREST RATES FOR TAX OVERPAYMENTS AND UNDERPAYMENTS (APRIL 2009 QUARTER)

Posted on March 12, 2009
The IRS has announced the interest rates for tax overpayments and underpayments for the calendar quarter beginning April 1, 2009. For noncorporate taxpayers, the rate for both underpayments and overpayments will be 4% (down from 5%). For corporations, the overpayment rate will be 3% (down from 4%)...

TAXPAYERS SHOULD USE IRS FOREIGN WITHHOLDING AUDIT PROCEDURES TO CHECK THEIR OWN COMPLIANCE

Posted on March 08, 2009
Absent the application of a treaty or other exception, U.S. payors of U.S. source dividends, interest, rents, royalties, compensation, and other fixed or determinable annual or periodical gains, profits, and income (FDAPI) are required to withhold 30% of such payments and pay them over to the U...

DO THE WEALTHY PAY THEIR FAIR SHARE OF INCOME TAXES?

Posted on March 05, 2009

POSSESSION STILL ONLY 9/10ths OF THE LAW

Posted on March 01, 2009

MARCH 2009 APPLICABLE FEDERAL RATES

Posted on February 26, 2009

FBAR GUIDANCE ON "DOING BUSINESS IN THE U.S."

Posted on February 22, 2009
U.S. persons with interests in or signature authority over foreign accounts are generally required to report those interests to the Treasury Department on Form TD F 90-22.1 (commonly referred to as the 'FBAR'). Internal Revenue Code definitions of "U...

EXTENDED NOL CARRYBACK PERIOD IN RECOVERY ACT DISAPPOINTS MANY

Posted on February 18, 2009
One of the few ?business friendly? tax provisions in the recently enacted Recovery Act is a temporary extension of the net operating loss (NOL) carryback period to 5 years from the usual 2. The purported benefit is to get cash into the hands of businesses who are presently suffering losses, by allowing them to carryback current losses to those earlier years and obtain income tax refunds...

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.