Take-Away: A trust and agency are both legal concepts about relationships. Because of this commonality in the relationships, the two concepts are often confused by the public. However, they are legally quite different. A trustee is not an agent of the beneficiary. Nor is the trust beneficiary an agent for the trustee. The trustee owes […]

Take-Away: In most cases, the time in which the IRS has to audit an income tax return will be either three or six years. However, in some cases, even though the income tax return was timely filed, the statute of limitations may never run with regard to a future IRS audit. Background: As a general […]

Take-Away: The proposed surtaxes on non-grantor trust income in the Build Back Better Act poses a real hardship on irrevocable trustees and trust beneficiaries while possibly also frustrating the settlors purpose for the Trust. Background: The proposed Build Back Better Act, passed by the House of Representatives and now pending before the Senate, includes an […]

Take-Away:  The pro-rata rule, which provides for the taxation of part of a distribution from a traditional IRA which contains both pre-tax and after-tax contributions, can be circumvented in only three ways, when the goal is to isolate basis (after-tax contributions) in the traditional IRA, which can then be converted to a Roth IRA. Background: […]

Take-Away: With the cryptocurrency boom in the news these days, it is important to know the federal taxation associated with crypto-mining. A token awarded to a crypto-miner will be taxed as ordinary income, while the sale of that reward-token will be taxed as the miner’s sale of a capital asset. Background: In the recent past […]

Take-Away: The Treasury Department’s tax proposals to generate revenues as part of the 2023 budget appear to be pretty much the same as many of the tax law proposals we read about in 2021, with only a few modest alterations. Background: In the Treasury Department’s General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals […]

Take-Away: An estate planning trend that is gaining some traction across the country is the adoption of a purpose trust to hold a closely held business. While there may be some definite advantages to holding a family business in a purpose trust, the income tax consequences can pose a major hurdle. Background: The necessary elements […]

Take-Away: In a recent survey among millionaires, 70% of the respondents expressed anxiety over leaving too much money to their heirs. Background: The Motley Fool recently conducted a survey of 2,000 individuals with a net worth over $1.0 million about their attitudes towards inheritances. One of the top concerns reported by 67% of these high […]

Take-Away: A trustee that assists an individual in asset protection strategies needs to protect itself against potential future claims of the individual’s creditors as ‘aiding and abetting’ the voidable transaction. Anyone who works with a debtor should seriously consider obtaining an affidavit of solvency from the debtor, as protection more for the service provider than […]

Take-Away: Unlike several other states, Michigan does not have a statute that formally recognizes the right of publicity. However, there is recognized a common law right of publicity by courts. Background: As a generalization, the right of publicity arises from the right of privacy. As one Tax Court Judge recently described it in the highly […]