Is a Revocable Trust a Trust (and Related Topics)?

The Sixth Circuit Court of Appeals has recently issued an opinion that discusses a number of topics especially important to asset protection and trust attorneys.[1] Some of the issues discussed involve trust law, tax law, asset protection law, and contract law. As recognized in the dissent, the court’s conclusions on a number of these issues…
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Incomplete Non-Grantor Trusts: A Tax Planning Tool

In recent years, estate planners and tax practitioners have been utilizing incomplete non-grantor trusts, or ING trusts, with increased frequency. The most common use of ING trusts has been to minimize state income taxes, but an often-overlooked aspect of ING trusts is their effectiveness as a tax planning tool at the federal level. ING trusts…
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MTC Partnership Update

Last year, I wrote about the Multistate Tax Commission’s (“MTC”) undertaking called the Project on State Taxation of Partnerships (“Project”).[1] Throughout the Project, the MTC has updated the Project website with summaries, notes, markups to draft documents, and other useful information.[2] The most recent Project meeting was held on July 25, 2022.[3] Broadly speaking, the…
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Taxpayer Loses Royalty Tax Case Appeal

In a recent appellate decision from the Ninth Circuit, a taxpayer/attorney/neurosurgeon/corporate shareholder who helped develop a patented imaging technology was held liable for ordinary income assessments with respect to annual royalty payments related to patent royalty income. Facts Dr. Aaron Filler, a licensed attorney and neurosurgeon, contributed to the development of a certain Diffusion Tensor…
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Checks Written Before But Cashed After Death Includible in Gross Estate

In a recent Tax Court case[1], the Court held that the combined value of ten checks written prior to the decedent’s death, but cashed after his death, was included in the gross estate of the decedent. However, as discussed below, the IRS had conceded that three of the ten checks were not included in the…
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Private Jet Charitable Deduction Fails for Lack of Substantiation

In Izen v. Comm’r, the Fifth Circuit Court of Appeals recently affirmed a Tax Court decision to deny a taxpayer’s charitable contribution deduction where the taxpayer failed to meet the statutory documentation requirements for the charitable contribution.[1] The key documentation that the taxpayer lacked was a contemporaneous written acknowledgement that included his taxpayer identification number.…
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IRS Eases Portability Late Relief with Rev. Proc. 2022-32

“Portability” is the ability of a surviving spouse to elect to add his or her predeceased spouse’s unused estate tax exemption to their own estate tax exemption. For many clients, adoption of portability in 2010 (and making portability permanent in 2012) meant that complicated estate plans could be greatly simplified. Prior to portability, any unused…
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New Estate and Gift Tax Clawback Proposed Regulations

On November 26, 2019, the Treasury Department and the IRS issued final regulations under Section 2010 which provided taxpayers with some much needed assurance that they would not be punished for utilizing their gift and estate tax exclusion (“Exclusion”) during their lifetime if Exclusion amounts were lower when they died (“Anti-Clawback Regulations”).[1] See Josh Sage’s…
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Change your Facts, Same Tax

Generally speaking, tax follows the facts. One can of course change those facts, but when done so merely superficially, intended results may not follow. Some may be more familiar with the phrase “putting lipstick on a pig.” Well, that seems to be more or less the case in the recent opinion released in the Eighth…
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