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 DidTax 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?Debacle
Understanding the etymology of a word often enables us to better understand or appreciate its use in contemporary speech. For example, the word “crypto” is derived from the Greek word “krypto,” which describes something that is hidden or concealed.[i]
For many months now, cryptocurrency – “crypto” for short – has received a lot of attention in the media,[ii] none of it favorable. Indeed, many of the stars in the crypto firmament have recently burnt out and fallen,[iii] and others are certain to follow.[iv]
Continue Reading Tax Losses Realized During the Crypto Winter“Gentleman Farmer”?
Every now and then, some well-meaning colleague will ask how I spend my free time. I usually pause before responding – to gather my thoughts – which prompts them to restate their question with what they believe is greater specificity; for example, how do I relax or what do I do for fun? After further delay on my part, the exasperated colleague will ask what I plan to do in retirement.
Continue Reading Generating Tax Losses as a HobbyThe 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?Taxing the Rich
During the last couple of months, as we headed into what most folks – excluding transactional attorneys – call the “Holiday Season,”[i] tax authorities from around the globe have been calling for increased taxes on the rich, however one chooses to define this class of individuals.
The chief economist for the European Central Bank, relying on macroeconomic policy and concepts of “fairness,” advised governments to tax the rich to support society’s vulnerable groups.[ii]
In the U.K., His Majesty’s Revenue & Customs announced an initiative to pursue tax fraud by the wealthy and mid-size businesses. In fact, it has been reported that HMRC plans to go so far as to assign agents to personally monitor the tax affairs of certain individuals – an odd variation on the “buddy system.” Continue Reading Pigs Get Fed, and Pay Their Taxes, But Hogs – That Remains to be Seen
Don’t Be Unreasonable
Much has been written of late regarding the payment by a business of various personal expenses incurred by its owner or certain key employees.
The payment of an owner’s personal expenses appears to violate a basic precept of the tax law with respect to the use of business assets[i] – specifically, that their use be limited to furthering the purposes and interests of the business.
This precept emanates from what is perhaps the golden rule for dealings between a closely held business and any of its owners and “related” persons: that they transact with one another on terms that are as close to arm’s length as practicable. Continue Reading Transacting With One’s Business – Keep It Arm’s Length
Denial
It wouldn’t be far-fetched to say that, as a species, we humans have a propensity – rooted in our instinctive tendency for self-preservation – toward denying anything we believe may cause us harm. It should come as no surprise that this natural inclination has found expression in the arts. For example, there are certain lyrics and movie scripts that include lines that are memorable only because they recall this defense mechanism called “denial.”
For example, the artist known as Shaggy[i] created a song around two[ii] simple words with which countless children and former children have responded to a variety of accusatory questions: “Wasn’t me.” Continue Reading Personal Liability for NY Sales Taxes –Sometimes, There’s No Denying It
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
