Income Tax

What Is It?

Where one stands on an issue of tax law may depend upon context and perspective, including the facts and circumstances one finds relevant, and whom one is counseling or representing.[i] 

Tax advisers often find themselves in situations in which they must ascertain either the “true” nature of a transfer of property between taxpayers[ii] – what they intended – or the character of the property that is the subject of the transfer. The determination of one may influence the outcome as to the other.…

Continue Reading Sale of Partnership Interests . . . In the Ordinary Course of Business?

Annual Ritual

The Budget and Accounting Act of 1921 established the requirement that the President submit a budget to Congress for the upcoming fiscal year.[i] Among other things, the proposed federal budget affords the President an opportunity to identify priorities for the next fiscal year, to quantify how much the Administration expects it will cost the government to attain the President’s goals, and to explain how and from what sources the funds needed to cover these expenses will be raised.…

Continue Reading The President’s 2024 Federal Budget: “Reforming” the Taxation of High-Income Taxpayers

History is replete with examples of leaders who chose to battle, or who were forced into defending against, enemies on two fronts. Rarely did it end well for the combatant that occupied the middle ground.

In a sense, New York has stumbled into a similar situation with two of its neighbors, New Jersey to the west and Connecticut to the east.[i] The three states,[ii] which comprise the Tri-State Area centered on New York City, are openly competing with one another for badly needed tax dollars.…

Continue Reading New York’s Convenience of the Employer Rule – New Jersey and Connecticut Respond

Farewell New York

According to a report issued by the National Association of Realtors a couple of days ago, last year saw a large outmigration of people from California and New York, while Florida and Texas experienced a comparably large influx.[i] I suppose we shouldn’t be surprised by these findings as they reflect the continuation of what has already been a multiyear trend.[ii]…

Continue Reading You “Placed Your Trust” In New York? You May Be Sorry You Did

Tax The Rich

Last Thursday, New York State Senator Gustavo Rivera, who represents the 33rd District (basically, the northwestern quadrant of The Bronx), proposed legislation that seeks to collect more taxes from the State’s high-income and high net worth residents.

Specifically, the stated purpose of the legislation is “amend the New York tax law to introduce an additional tax on investment income (capital gain), for the purposes of correcting the unfair federal tax benefit for income earned from investing rather than working.”…

Continue Reading Will New York Increase Taxes On Investment Income?

The Returns

Last Friday, December 30, 2022, during the final hours of the 117th Session of Congress, the House Ways and Means Committee – through which all tax legislation passes[i] – released redacted versions of six years of Mr. Trump’s annual federal income returns.

I told myself months ago that I would not waste my time reviewing the returns if they were ever made public. However, after several acquaintances peppered me with questions regarding the returns over the long holiday weekend, I relented and quickly skimmed the earliest of the returns, for 2015.…

Continue Reading Trump’s Returns and Congress – Lessons, Next Steps?

Lately I’ve been thinking about the many ways by which members of the public transfer funds to government and the many reasons for which such transfers are made. After all, we’re still in the “season of giving.”[i]…

Continue Reading New York’s “No-Longer-a-Sin” Taxes – Effective? Progressive? Neither?

Related Party Transactions – In General

To avoid the manipulation of tax consequences to which transactions between certain related[i] taxpayers may be susceptible, the IRS and the Courts generally require that such transactions be closely scrutinized to ensure that the form of the transaction reflects its underlying economic reality,[ii] and that the tax consequences arising therefrom are consistent with those arising from transactions between unrelated parties dealing at arm’s length with one another.[iii]

Similarly, the Code and the regulations promulgated thereunder have long recognized that a taxpayer who engages in certain transactions with another party should be denied a particular tax benefit that would otherwise be realized from the transaction if the taxpayer and the other party bear a certain relationship to one another and if the sought-after tax benefit is inconsistent with the economic consequences of the transaction. …
Continue Reading Related Party Transactions Converting Gain Into Ordinary Income – Be Careful Out There

Across the Hudson

Last week, Governor Murphy of New Jersey staked out a position on New York City’s congestion pricing proposal, stating that it “can’t be ‘on the backs of New Jersey commuters.’”[i]

“Whether it’s how we’re taxed by our neighbors or this proposal for a congestion-pricing scheme that would be a huge burden on commuters,” the Governor continued, “we can’t have it both ways.”

Of course, the Governor was referring to New York’s taxation of New Jersey residents who are employed in New York and whose earnings are taxed in New York, for which the New Jersey residents claim a credit against their New Jersey income tax liability on such earnings.[ii]…
Continue Reading Push-Back On New York’s Mission to Tax Non-New Yorkers?

Where is the Economy Heading?

According to the data released Friday by the Department of Labor, the U.S. economy added approximately 528,000 jobs in July, reducing the unemployment rate to 3.5 percent.[i] Although this figure was certainly better than what was expected by many economists, it seems to belie other signs of economic weakness.

Many states, for example, have reported recently that they are experiencing significant declines in estimated tax payments or that they expect declines in revenue from the withholding of personal income taxes.[ii] These developments are being attributed to the performance of the stock market[iii] and to the fact that wages have not kept in step with inflation.[iv]…
Continue Reading New York to Taxpayer: “Forget What the Feds Said, You’re a ‘Responsible Person’”