Take-Away: There is no consensus on what happens when more than one donor makes a gift to a trust for a beneficiary who possesses a Crummey withdrawal right.  The lapse of the right of withdrawal is not treated as a ‘gift’ or ‘disposition of property’ if the lapse is limited to the greater of $5,000 […]

Take-Away: The IRS published two Notices in the past ten days that impacts distributions from qualified plans. While they were reported in missives last week, due to a couple of follow up questions that I received, I thought I would clarify a couple of limitations contained in those two Notices. Notice 2020-50: This was released […]

Take-Away: Gifts to charities are tax deductible, less anything of value that the donor receives from the charity in exchange for the gift. The return of value to the donor, or quid quo pro, is usually found in charitable fundraising events and activities. Failure to adhere to the quid pro quo rules can result in […]

Take-Away:  A hardship distribution from a qualified plan is not the same thing as a coronavirus-related distribution from a qualified plan. While there are some similarities, the requirements for each distribution is a bit different. This is probably also a timely reminder that there are no hardship distributions from an IRA; an IRA owner has […]

Take-Away: While highly regulated, split-dollar life insurance plans for key employees and executives are finding more creative approaches like loan split-dollar plans, which gained attention and  some notoriety, University of Michigan’s football coach Jim Harbaugh’s contract. Apparently a $8.05 million annual salary was not enough for Jim and he needs tax-free income in retirement. Background: […]

Take-Away: The IRS published its Final Regulations with regard to IRC 199A, the 20% qualified business income deduction for individuals. These Regulations go into effect on August 24, 2020. The IRS did not, however, alter its prior position that it will not apply the separate share rule to beneficiaries of a trust or an estate […]

Take-Away: The 2017 Tax Act provided new rules on who, when and how to report a sale of a life insurance policy. Less obvious is that these new rules can make part of the death benefit paid under a life insurance policy taxable when under the prior tax laws the death benefit paid would have […]

Take-Away: The IRS’s Final Regulations on Opportunity Zone Funds answered a few questions that estate planners had when a client dies owning such an investment. Unfortunately, not all the answers the IRS provided were what planners wanted to hear. In addition, a surprising number of transactions with respect to an opportunity zone fund investment will […]

Take-Away: The IRS issued Notice 2020-51, which was previously reported on, to extend the time to restore required minimum distributions taken earlier in 2020 to August 31, 2020. Other ‘rules’ regarding distributions from retirement plans were also covered in this Notice that were not as noteworthy as the ability to ‘restore’ a previously taken required […]

Take-Away: The ownership of an annuity in any manner other than by an individual can be very complicated. Multiple tax questions arise, without a lot of answers, if a trust owns a tax deferred annuity. In general, annuities are supposed to be owned by natural persons. A trust is not a natural person. Background: This […]