Author Archives: David L. Silverman, J.D., LL.M. (Taxation)

Minimum Distribution Rules in 2002

The new minimum distribution rules are now mandatory for distributions from qualified plans or traditional IRAs in 2002. Minimum distributions must begin by the Required Beginning Date (RBD), which is April 1st of the calendar year following the later of … Continue reading

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Perspective on 2001 Tax Act

The 2001 Act repeals the estate and GST tax for decedents dying after December 31, 2009. The top marginal estate tax rate, now 55%, will decrease incrementally to 45% in 2007. The estate tax exemption, now $1 million, will rise … Continue reading

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Supreme Court Holds Punitive Damages Not Excludible (July 1997)

The Supreme Court, resolving a conflict among the circuits, has held that the exclusion from gross income provided for by IRC Sec. 104(a)(2) for the “amount of any damages received…on account of personal injuries” does not extend to punitive damages.  … Continue reading

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2001 Gift and Estate Tax Decisions of Note

The 5th Circuit, in Estate of Jameson v. Comr., 267 F.3d 366, made further inroads into the doctrine of precluding valuation discounts for built-in capital gains. Reversing the Tax Court, it held that a full discount for accrued capital gains … Continue reading

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2001 REGS, IRS RULINGS & PRONOUNCEMENTS

The National Office in FSA 200119013 held that where the decedent’s estate included 50% of the shares of a closely held corporation, as well as a general power of appointment over 44% of the shares pursuant to a marital deduction … Continue reading

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United States International Taxation

The U.S. international income tax rules are among the most complex in the Code. The purpose of this article will be to set forth in a comprehensible manner the essence of those rules. Part I will discuss how a foreign person may become subject to U.S. tax, and the distinction between foreign and domestic “source” income. Part I will also introduce the concept of income “effectively connected” with a “U.S. trade or business.” Part II, appearing in the next issue, will conclude a discussion of the trade or business concept, and will discuss the foreign tax credit, the impact of treaties, and other issues. Continue reading

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New York Revised Legislation Re: Revocable Inter Vivos Trusts (October 1997)

New York attorneys have often looked closely at what revocable inter vivos trusts (RIVTs) have to offer as a testamentary substitute only to ultimately recommend against their use in favor of a Will. Although immensely popular in California and Florida, … Continue reading

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Taxpayer Relief Act of 1997

Capital gains tax rates were substantially reduced by the 1997 Tax Act. Capital assets held for 18 months and sold after after July 28, 1997 are eligible for the new 20% tax rate. The old 28% rate continues to apply … Continue reading

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Depreciation Recapture

The recent reduction in capital gains tax rates underscores the importance of taxpayers planning their transactions to avoid recharacterization of Code Sec. 1231 capital gain to ordinary income when disposing of certain depreciable property. Section 1231 property is property used … Continue reading

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Estate Planning Checklist

The level of sophistication of estate plans varies with the size and complexity of an individual’s estate. A carefully drafted Will or revocable inter vivos trust is the starting point for many plans. The revocable inter vivos trust is highly … Continue reading

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Charitable Remainder Trusts

Extremely useful in estate planning, charitable remainder trusts (CRTs) provide for specified distributions at least annually to one or more beneficiaries for life or for a term of years, with an irrevocable remainder interest passing to a designated charity. The … Continue reading

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Avoiding Inclusion of Life Insurance Proceeds in Estate

IRC Sec. 2042 provides that all policies of insurance received by or “for the benefit of” the estate are included in the decedent’s gross estate. Proceeds paid to beneficiaries are also includible if the decedent assigned the policy but possessed … Continue reading

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2002 Tax Act

The 2002 Tax Act provides $38.7 billion in tax incentives; most for businesses with modest incentives for individuals. Of particular interest is a new provision which allows an additional 30% depreciation deduction in the first year. The Act also contains … Continue reading

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Supreme Court Holds IRS Lien Encumbers Entireties Property

Departing starkly from a body of decisional law burnished by time in the lower courts, the Supreme Court, in United States v. Craft, No 001831(4/17/02) reversing the 6th Circuit, held that a spouse’s interest in entireties property constitutes property or … Continue reading

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REGS, IRS RULINGS & PRONOUNCEMENTS — June 2002

Final Regs. governing required minimum distributions (RMDs) from qualified plans and IRAs adopt, in modified form, the simplified rules proposed in 2001. Among them: (i) new tables of life expectancies for calculating RMDs; (ii) a new date for determining the … Continue reading

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