Category Archives: Tax News & Comment

2007 Estate & Gift Tax Cases

The 11th Circuit, reversing the Tax Court, held that an estate properly reduced the value of the decedent’s interest in a company holding marketable securities by the company’s entire $51 million built-in capital gain tax liability. Estate of Jelke Est. … Continue reading

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MINIMIZING THE IMPACT OF THE ALTERNATIVE MINIMUM TAX (AMT)

Originally intended as a backstop to prevent tax-avoidance by high income taxpayers, the AMT now affects a soaring number of middle income taxpayers. The AMT applies if it is higher than the taxpayer’s regular tax liability. Continue reading

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2007 Estate and Gift Tax Decisions of Note

President Bush Proposes $150 Billion Stimulus Package Continue reading

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USE OF DISCLAIMERS IN POST-MORTEM ESTATE PLANNING

Many Wills have been drafted to eliminate the estate tax at the first spouse’s death by (i) funding a credit shelter trust with the maximum amount such that no estate taxes are due and then (ii) leaving the remaining share … Continue reading

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IRS ISSUES GUIDANCE FOR HEALTH SAVINGS ACCOUNTS

Notice 2004-2 provides guidance for new Health Savings Accounts (HSAs) which, beginning in 2004, may be funded by an “eligible individual” with tax deductible cash contributions which grow tax-free. Tax-free distributions from the account may be made by the taxpayer … Continue reading

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Partnership Assessment Extends Collection Statute Against Partners

Reversing the 9th Circuit Court of Appeals, the Supreme Court has held that a timely assessment against a California partnership extends the statute of limitations for collection of tax against the general partners. U.S. v. Galletti et al, 541 U.S. … Continue reading

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2007 IRS REGS., RULINGS AND PRONOUNCEMENTS

Printer-friendly PDF:  2007 Regs., Rulings & Pronouncements.wpd A. New Regs Govern Estate Deductions All federal circuits, except the Eighth, have long adhered to the view that post-mortem events must be ignored in valuing claims against an estate. Ithaca Trust Co. … Continue reading

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Tax Aspects of Incorporating

Deciding whether to incorporate a business requires careful analysis.  Often the taxpayer will be faced with competing choices of operating the business as a sole proprietorship, or as an S corporation.  Simply because nontax factors favor incorporating, do not assume … Continue reading

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Revenue Reconciliation Act of 1993

Though not constituting a sea change in the tax law, the Revenue Reconciliation Act of 1993 nevertheless deviates substantially from the tax course charted by the Tax Reform Act of 1986. President Clinton has apparently kept his promise of not … Continue reading

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Partnership Taxation

A partnership, for tax purposes, is defined by negative implication.  It is a “joint venture” or similar organization engaged in business that is not classified as a trust, corporation or estate. Partnerships, unlike corporations, generally pay no income taxes. Taxes … Continue reading

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Wash Sales

Under Internal Revenue Code  Sec. 1001, gain or loss realized on the sale or exchange of property is the excess of the amount realized over the adjusted basis. If one purchased 100 shares of Exxon in August, 1993, and sold … Continue reading

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Administrative Appeals Within the Internal Revenue Service

At the heart of the Internal Revenue Service procedural engine lies the internal appeal process, whose  function is to resolve taxpayer disputes through the use of negotiation and settlement, without the necessity of litigation. The Appeals office has “exclusive and … Continue reading

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Itemized Deductions

Deductible expenses may be classified as either above-the-line or below-the-line deductions. While above-the-line deductions reduce gross income, below-the-line or itemized deductions reduce adjusted gross income (AGI). For a taxpayer in the 39.6 percent tax bracket, each dollar of above-the-line deduction … Continue reading

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Limited Liability Companies

The Limited Liability Company (LLC) is a popular form of business entity. A creature of state law,  virtually all states, including New York, have enacted LLC statutes. The principal allure of the LLC is the liability protection it affords its … Continue reading

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IRS Ruling Blesses New York RLLPs (January 1996)

New York Partnership Law Sec. 121-1500 provides that a professional partnership without limited partners may register as a limited liability partnership (RLLP) by registering with the NYS Department of State. The IRS has ruled that this registration results in seamless … Continue reading

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