Month: February 2020
Tax Court Denies Bad Debt Deduction
In Herrers, TC Memo 2012-308, the Tax Court sustained a deficiency asserted against a married couple who reported pass-through bad debt deductions from a limited liability company named HSA. The Herrers’ claimed such bad debt deduction on the grounds that a related...
BENEFICIARY DESIGNATIONS
Beneficiary designations are becoming one of the “hot” topics in estate planning and litigation because of the amount of wealth being transferred. It is very important for you to know and understand whom you have named as your primary and contingent beneficiary of...
Does an Adoption REALLY mean an Adoption for Inheritance Purposes?
Under Section 63.172 and Section 732.108 of the Florida statutes, if a biological child is adopted away from a biological father, and the child’s biological father dies without a will (intestate), then the child will not inherit because the child is considered a child...
State Statute Throws Beneficiary a Lifeline!
Private Letter Ruling (“PLR”) 201706004 addresses a beneficiary designation issue. Taxpayer died owning an individual retirement account (“IRA”). The beneficiary designation indicated that taxpayer’s trust was the beneficiary. The only problem? There was NO trust...
Owning your own business…One way to get help!
I know from the first day I opened my law practice that it was going to be a difficult process. Luckily I have my CPA and business background but little did I know that I was going to have be a computer expert, a plumber, a carpet cleaner, a file clerk, human...
Am I Too Young For Estate Planning? I Do Not Own Anything!
This author frequently hears this question because people think estate planning is only for older rich people. Generally, an individual is an adult at 18, at which time he or she can prepare estate planning documents. Unfortunately, most young adults will not...
Improper GSTT Exemption Allocation…IRS Grants Relief!
The generation skipping transfer tax (“GSTT”) is a harsh tax (40%) imposed on certain transfers to grandchildren and certain individuals in that same generation. Fortunately, the Internal Revenue Code (the “Code”) provides a GSTT basic exclusion amount (the...
Should Your Trust Be a Beneficiary of an IRA?
Once a person dies, the Internal Revenue Service requires that the designated beneficiary (“DB”) of an Individual Retirement Account (“IRA”) take minimum required distributions (“MRD”) from the IRA each year. You can take more than the MRD but you MUST take at least...
New rules for inherited IRAs may be coming….
Many of you may inherit traditional IRAs from loved ones. While inheritances are usually good news there is bad news also… income taxes!!! If you decide to withdraw the money in one lump sum, then you will be taxed on ALL the income in one year. Luckily the IRS has...
Sigh of Relief for Missed Allocation of GST Exemption
As I have discussed in a prior blog, the generation skipping transfer tax (“GSTT”) is a harsh tax and can total as much as 80%, when combined with the estate tax. Fortunately, each US individual is entitled to an exemption of $11.2 million in 2018. For our wealthy...