Take-Away: Effective June 30, 2020, the SEC’s Best Interest Regulations will govern broker-dealers. These Regulations require a broker to ‘exercise reasonable diligence, care and skill when making recommendations to their client’, which includes ‘understanding the risks and rewards of their recommendation, as well as the inherent costs in those recommendations.’ Consequently, a broker must properly […]

Notice 2020-50. Background:  The CARES Act authorizes qualified individuals to receive favorable tax treatment with respect to distributions from eligible retirement plans that are coronavirus-related distributions. Such a distribution is not subject to the 10% early distribution excise tax [IRC 72(t)] or the 25% penalty for early distributions from a SIMPLE IRA [IRC 72(t)(6).] The […]

Take-Away: The Department of Treasury on April 9 added to the list of extensions to file tax returns and pay taxes, expanding the extension to include gift and estate tax returns. Source: Notice 2020-23 Background: This new Notice is intended to amplify prior Notice 2020-18 which was previously summarized. This Notice extends the time to […]

Take-Away: Undue influence does not have to be the result of an intentional act. Background: We normally think of undue influence as a situation where one individual intentionally imposes his/her will over another individual, which is often the case. However, undue influence can be achieved without an intentional act according to Michigan courts. Definition: Undue […]

Take-Away:  Roth IRA conversions options exist under the 2020 charitable giving option created under the CARES Act. While not for everyone, for those charitably inclined donors with large IRAs, this may be a good year in which  to consider a Roth IRA conversion. Background: The Cares Act, which passed on March 23, 2020, contains a provision […]

Take-Away: One court recently held that a deems advisable discretionary trust distribution standard permitted the trustee to require the production of the trust beneficiary’s business records. This standard is frequently used when an asset-protection discretionary trust is created for the trust beneficiary, as provided under Michigan’s Trust Code, the beneficiary does not possess any property […]

The IRS in Revenue Ruling 2020-11 just published the applicable federal rates of interest (AFR) for May 2020. [IRC 1274(d).] These rates are often used with regard to intra-family loans, in order to avoid an implied gift due to a below-market interest rate charged. Short-Term Rate: (less than 3 years) is 0.25% whether the period for […]

Take-Away: One court recently held that a deems advisable discretionary trust distribution standard permitted the trustee to require the production of the trust beneficiary’s business records. This standard is frequently used when an asset-protection discretionary trust is created for the trust beneficiary, as provided under Michigan’s Trust Code, the beneficiary does not possess any property […]

Take-Away: Gross taxable income of an individual includes income from the discharge of indebtedness. The Tax Code does, however, provide a set of exceptions to this general rule. The nature of a business, e.g. partnership vs LLC vs S corporation that has its indebtedness discharged can lead to differences in how that discharge of indebtedness […]

Take-Away: There is a renewed interest in long-term care insurance policies now that insurance companies have become more creative, especially with their introduction of hybrid life policies. Some existing life insurance policies, even those held in an irrevocable life insurance trust (ILIT) might be appropriate to be exchanged for a hybrid life insurance policy. Background: Long-term […]