Gift Tax

Intrafamily Transfer

A parent will sometimes transfer money to a child to enable the child to make an investment that the child could not otherwise make on their own.

For example, the child may have identified an attractive business opportunity but does not have sufficient assets or liquidity with which to make an investment therein, is unwilling or unable to sell other assets to raise the funds, and has not been able to borrow the necessary amount on acceptable terms from an unrelated lender because the market rate of interest may be too high, the repayment schedule may be too short, or the collateral requirements may be difficult to satisfy.Continue Reading “Hey Mom, Can I Have A Few Bucks?” Is It A Loan? A Gift? A Little of Each?

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?

Tax the Rich?

The President’s plan for a tax regime that would ensure the rich pay their “fair share” of the cost of implementing his programs has come one step closer to being realized . . . maybe . . . well, sort of . . . at least in part. You know, half a loaf (unless it’s whole wheat) is better than none. Voting strictly along party lines,[i] the House of Representatives on Friday[ii] morning passed an approximately $1.75 trillion version of Mr. Biden’s $3.5 trillion Build Back Better plan by a vote of 220 to 213.[iii]
Continue Reading One Step Closer to “Building Back” – Where Do Federal Transfer Taxes Stand?

Same old in D.C.

On Monday, November 15, the President will sign into law the approximately $1 trillion Infrastructure Investment and Jobs Act that was finally passed by Congress when the House approved the Senate’s version of the legislation on November 5. According to various reports, an estimated $6 billion of this monumental sum will find its way into Senator Manchin’s West Virginia:

“[Manchin] said $3 billion will go to federal highway programs in the state; nearly $200 million will go to complete Corridor H of the Appalachian Development Highway System, which is known within the state as the Robert C. Byrd Highway System; $190 million for statewide transit; $43 million for state airports and $700 million to rehabilitate abandon [sic] mine lands.”[i]

Continue Reading Gift Transfers: Not on the Congressional Agenda, But Still in the Crosshairs of the IRS

Extra, Extra![i]

Last Friday afternoon, as millions of unsuspecting Americans prepared for the long Memorial Day weekend[ii] – for many, perhaps, their first mask-less holiday celebration in almost 15 months – the Biden Administration released its 114-page “Green Book” for the federal government’s 2022 fiscal year.[iii]Continue Reading The Biden Administration’s Revenue Proposals for Fiscal Year 2022: Tax Increases and Forced Recognition of Capital Gains

Go After Real Estate?

During the 2020 presidential campaign, there was one segment of the “rich” for which then-candidate Biden seemed to have reserved some of his harshest criticism – wealthy real estate investors. Moreover, the Democratic Party’s platform included several proposed changes to the Code[i] the impact of which would probably be felt most keenly by such investors.[ii]

Query the origin of this posture. Was it grounded – pun intended – in the Party’s association, rightly or wrongly, of the real estate industry with Mr. Trump?[iii] But how can this be reconciled with the sizable contributions made by industry leaders to Mr. Biden’s campaign and to political action committees that supported him?[iv]

Regardless of why candidate Biden identified the federal taxation of real estate as an example of what he described as the Code’s special treatment of the wealthy,[v] President Biden recently proposed that the Code be amended to limit many of the favorable provisions upon which real estate investors have long relied for purposes of evaluating the acquisition, operation, and disposition of investment properties.Continue Reading “Earth to Earth”: Real Estate, Death and Biden’s Tax Proposals

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?

According to Justice Learned Hand, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Stated differently, taxpayers have the right to pay only the amount of tax legally due.

Having said that, taxpayers have, over the years, demonstrated varying degrees of aversion to their tax obligations – especially in high-tax states like New York. Those New York taxpayers who are willing to “roll the dice” are hopefully aware of the associated audit risk, but many of them may be ignorant of the exposure they face from New York’s False Claims Act.Continue Reading Thinking About ‘Avoiding’ NY Tax Increases? Then Think About the False Claims Act