Life Insurance – It’s for the Living
If you’re reading this post, you survived the Thanksgiving holiday – hopefully, without much family drama.[i] Then again, there may have been moments, inspired by an overload of obligatory togetherness, that caused you to think about life insurance, either on your own life or on that of…
Remember Taxes
Every conveyance of property or of an interest in property from one person to another is prompted, or at least influenced, by economic considerations. The parties to the transaction may swap properties, or one party may transfer a property to another in exchange for money[i] or for the services of the other party. In these instances, there has been a conscious or deliberate exchange of value between the parties – each party has determined that the exchange will improve their own position.[ii]Continue Reading Terminating a Trust? Don’t Forget to Consider This Tax Issue
Holiday Gatherings
How was your Thanksgiving? I hope you celebrated the holiday in a pleasant setting with folks whose company you enjoyed, and with plenty of good food. I hope you participated in some interesting conversations or joined in some fun games. I hope your NFL team put on a decent show.[i] I hope you had – and will continue to have – many reasons for which to be thankful, that you acknowledged them, and will continue to do so.
At some point during our family’s celebration of this uniquely American holiday,[ii] I almost always find myself apart from the rest of the group, observing how others are interacting with one another, sometimes recalling how they may have handled certain challenges during the year,[iii] and often wondering what sort of future awaited them.[iv]Continue Reading The Holidays – A Time for Family, Reflection and. . . GST Tax Planning?
As we will see shortly, it is often “better to give than to receive,”[i] though this statement begs the obvious question[ii] of whether it is better to do so during one’s lifetime or upon one’s death.
Many well-to-do individuals are seriously deliberating this question[iii] as they contemplate the impending federal elections and consider how the outcome of these contests may influence their plans for the disposition of various assets, including the transfer of such assets, or the value they represent, among members of such individuals’ families.Continue Reading Thinking About Making Taxable Gifts Before the 2026 Sunset?
Mere Change in Form
It is a basic principle of the income tax that the gain or loss realized by a taxpayer from the conversion of property into cash, or from the exchange of property for other property that differs materially in kind from the exchanged property, is treated as realized income or loss.
Moreover, the general rule with respect to such realized gain or loss is that the entire amount thereof is recognized for purposes of determining the taxpayer’s income tax liability,[i] except in cases where the Code specifically provides otherwise.[ii]Continue Reading Trust Beneficiary Engages In Like Kind Exchange Using Trust Property
Death of a Parent
In the context of a family-owned business, it is often the case that the matriarch or patriarch of the family is also the chief executive of the business. They may have founded the business, or they may have been at its helm for longer than most can remember. This individual’s strength of character, knowledge of the business, reputation in the industry, and experience, are resources that are nearly impossible to replace anywhere near as quickly as the family and the business would like. In other words, their passing may turn out to be the most disruptive event in the history of the business.Continue Reading Transferee Liability for Estate Tax: The Downside of Being a Beneficiary
One of the reasons often given for eliminating the estate tax is the substantial economic burden it places upon the estate of a deceased business owner and upon the business itself. Specifically, within nine months of the owner’s death, their estate is required to satisfy its federal estate tax liability, which is determined by applying a 40 percent tax rate to the date of death value of the decedent’s assets, including their interest in the business.[i]Continue Reading Corporate-Owned Life Insurance, a Redemption, and The Value of a Decedent’s Stock
It is a fact that the phenomenon of human migration has been a major force in the history of the world.[i]
Indeed, among the themes that have remained constant during my years of practice, there are two that may be described, semi-facetiously, as modern manifestations of humanity’s migratory tendencies.
Continue Reading Moving to the U.S.? Have You Planned for the Estate and Gift Taxes?
The Issue
I recently encountered an interesting situation in which someone suggested that a grantor trust be decanted into a non-grantor trust before the end of the taxable year. The reason? To avoid the special interest charge that would otherwise be imposed with respect to the deferred tax liability attributable to the trust’s share of an installment obligation.[i]
The trust’s principal asset was a membership interest in an LLC that was treated as a partnership for purposes of the federal income tax. Among the assets held by the partnership was an installment obligation that had been received by the partnership earlier in the taxable year in exchange for the partnership’s sale of unimproved real property.
In order to appreciate the issue presented, it may be helpful to first take a short walk through the installment sale rules.
Continue Reading Planning for the Interest Charge on Installment Sales: Decanting a Grantor Trust?
A Night to Remember?
Did you listen to the President’s speech last Wednesday? He addressed a joint session of Congress to pitch the Administration’s $1.8 trillion American Families Plan. Due to COVID-related restrictions, there were only about one hundred elected officials present in the House Chamber;[i] other invited guests brought the total in attendance to approximately two hundred.[ii]
The sparsely occupied room was to be contrasted with the targeted audience: the almost 27 million U.S. viewers who tuned into Mr. Biden’s speech, and whom he hoped to enlist in his effort to sway a closely divided Congress.[iii]Continue Reading The President’s Recent Tax Proposals: What Do They Mean for Business Owners?
