Take-Away: I previously reported on FINRA rule 2165 which was effective on February 5, 2018. In response to a follow-up question that I received, this rule does not mandate a report of suspected financial exploitation by the investment advisor. Background: In February of this year FINRA announced two new rules. Trusted Person: FINRA rule 4512 […]

Take-Away: Last week the IRS published proposed Regulations that would eliminate our concerns about claw-back, which is the fear that gifts made before 2026 which were protected by the donor’s large lifetime gift tax exemption amount, would be ‘clawed-back’ into the donor’s taxable estate at death, causing those previous gift-tax-exempt transfers to be taxed at […]

Take-Away: If an irrevocable trust is not operated as a separate legal entity, and the settlor retains extraordinary control over the trust and the income the trust generates, the trust may be ignored for income tax reporting purposes with the result that the trust’s income is attributable to the settlor of the trust. Case: Full-Circle […]

Take-Away: When dealing with lifetime gifts during this period of the temporary increase in an individual’s basic exclusion amount (BEA) it is important to keep in mind that there exists a priority with regard to what tax exemptions are used to shelter lifetime gifts. That priority is: (i) deceased spouse’s unused exemption amount (DSUEA); (ii) […]

Take-Away: With the Presidential campaign soon, to take center stage this year, individuals might consider adopting some estate planning steps or trusts before the election is final and the possible change in the White House and composition of Congress. Background: Senators Warren and Sanders recently gained our attention renewing their proposed tax law changes that […]

Take-Away: The SECURE Act created some confusion when it increased the required beginning date after which required minimum distributions will be taken to age 72, but it left in place the existing rule that permits required minimum distributions to be satisfied with qualified charitable distributions once the IRA owner attains age 70 ½.  Adding to […]

Take-Away: The SECURE Act’s ‘new’ 10-year distribution rule has left many confused as to whether it replaces the Tax Code’s at least as rapidly distribution rule when the IRA owner dies after his/her required beginning date. It appears that despite the ‘new’ 10-year distribution rule, the at least as rapidly option to take distributions over […]

Take-Away: Some commentators have suggested the transfer of title to a residence to a non-grantor trust to circumvent the 2017 Tax Act’s $10,000 deduction limitation on state and local taxes (SALT) as the trust is a separate income taxpayer with its own itemized deductions. While that planning step may be attractive,  it is important to […]

Take-Away: With the SECURE Act’s elimination of the stretch distribution rules for most retirement account beneficiaries, more attention may now be devoted to the use of charitable remainder unitrust as a substitute for an existing conduit see-through trust. A charitable remainder unitrust can work reasonably well as an alternative to a stretch see-through, but not […]

Take-Away: An irrevocable trust faces a marginal federal income tax bracket of 37% on accumulated income in excess of $12,750 each year. One way to mitigate that tax erosion is to establish a beneficiary deemed owner trust, or BDOT. With a BDOT the beneficiary is taxed on the trust’s income each year, at the beneficiary’s individual […]