Take-Away: Many wealthy individuals grudgingly acknowledge that they should take advantage of today’s $11.85 million federal transfer tax exemption. However, they are reluctant to do so out of a fear that they may need access to those transferred assets sometime in the future. Estate planning strategies exist that can reassure those individuals that they can […]

Take-Away: With interest rates so long, intra-family loans using those low interest rates have garnered interest. Sometimes, however, the IRS claims that the loan is really a taxable gift. How the transaction is structured and reported will go a long way to demonstrate that no gift was intended. Background: The US Tax Court has often […]

Take-Away: A qualified charitable distribution (QCD) is an excellent way to carry out philanthropic objectives. However, there are several restrictions on the use of a QCD. In 2020, with one of the provisions of the CARES Act, a couple of the impediments to the QCD can be avoided if a donor wishes to make a […]

Tale-Away: IRC 7872 provides that if an individual structures an intrafamily loan consistent with what that Tax Code requires, i.e. using the applicable federal rate (AFR) of interest for the month of the loan, that loan will not be treated as a gift for gift tax purposes. If IRC 7872 is followed, the promissory note […]

Take-Away: IRC 7872 provides that if an individual structures an intrafamily loan consistent with what that Tax Code requires, i.e. using the applicable federal rate (AFR) of interest for the month of the loan, that loan will not be treated as a gift for gift tax purposes. If IRC 7872 is followed, the promissory note […]

Take-Away: The Michigan Court of Appeals recently provided guidance on when gifts are authorized to be made from a Trust, including gifts to the trustee and the trustee’s children. Reported Decision: In re Estate of Vernon Stephenson, Michigan Court of Appeals, No. 348207, (July 30, 2020) Unpublished Facts: The parents created reciprocal durable powers of […]

Take-Away: Irrevocable trusts are heavily taxed when they accumulate income. A mistaken belief is when an IRA is paid to the Trust that taxable income can be distributed to the income beneficiary of the Trust and avoid the high income tax brackets at the Trust’s level. That is not the case when the Trust is […]

Take-Away: A non-US person can gift an unlimited amount free of any federal gift tax. What and how that gift is made, however, controls whether a federal gift tax is actually owed. Background: A gift that a US person receives from a non-US person might be completely free from both the federal gift tax and […]

Take-Away: As we approach the final one-third of 2020 and brace ourselves for the nonstop distractions and the rhetoric of a Presidential election, there are some planning steps we need to bring to the attention of our clients, especially if 2021 also brings a new Congress, a new Chief Executive, and the increasing likelihood of […]

Take-Away: With more qualified plans now accepting Roth 401(k) contributions in order to minimize income taxes in retirement years, it is important to become familiar with the distribution rules associated with a Roth 401(k) account. Background: Like Roth IRAs, distributions from a Roth 401(k) accounts can either be qualified or non-qualified. Qualified Distributions: If a […]