Missives

As Congress continues to cut back on federal program grants and entitlements, it should come as no surprise that the shortfall in that governmental support will have to be met through local charities and nonprofit organizations.

Probably one of the biggest dangers associated with Trump Accounts is the assumption that they work and are reported exactly like traditional IRAs.

As we near the Trump Account starting date of July 4, we now have access to an app to assist with opening, funding and managing such an account.

The choice of a funding formula in a trust, often with a marital deduction trust funding formula can affect how the bequest is funded. Similarly, a trust funding formula can be used to fund a nonspousal trust, e.g., a credit shelter trust, or simply a pecuniary, i.e., dollar amount bequest, allocated to an individual.

As prospective donors weigh the pros and cons of contributing to a Trump Account or to a 529 qualified higher education account, they should factor in the potential cost, and hassle, of filing a federal gift tax return (Form 709) for their contribution to a Trump Account.

There are pros and cons when debating to contribute to a Trump Account, or a 529 account, or a Uniform Transfers to Minor’s Account. One such ‘con’ might be the level of required reporting that is associated with a Trump Account.

The initial trustee of a Trump account has been identified by Treasury, along with rules for when funds are rolled over to a successor trustee of a Trump account. The IRS has also released a draft of the Form for annual reporting for Trump accounts.

Ladybird deeds are highly effective to avoid probate of real estate on the owner’s death, but they can also expose the beneficiary to losses due to the lapse of insurance coverage.

When reporting income, beware of the claim of right doctrine that requires reporting the income in the year of its receipt when there are no apparent restrictions as to the income’s disposition, even if that income must later be repaid.

Not all wedding expenditures result in taxable gifts, but it will be important to structure and document large expenses correctly to allocate them to hosting costs and thus avoid being classified as an indirect gift.