Background The traditional estate planning game has been to: (1) ensure client wishes were achieved by drafting wills and trusts such that the assets within the client’s estate served the intended purposes and landed in the hands of the desired beneficiaries, and (2) minimize or eliminate estate (and generation skipping) taxes. Since 2000, a few…
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The Internal Revenue Service recently released the Applicable Federal Rates (“AFR”) and the Section 7520 rate (“7520”) for August 2018. While the AFR remains low from a historical standpoint, as do interest rates in general, there has been a recent trend of rising interest rates. The short term AFR has increased from .56% for August 2016…
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BACKGROUND THE PARTIES On July 2nd, 2018, the Tax Court released its ruling in Roy E. Hahn, et al. v. Comm’r, TC Memo 2018-100. The case revolved around whether the taxpayers were entitled to deduct certain losses from a Custom Adjustable Rate Debt Structure (CARDS) transaction. The primary reason for this article is not to…
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The Tax Court has recently issued an opinion addressing several significant estate planning issues. In Estate of Cahill, T.C. Memo 2018-84, the Tax Court reviewed an inter-generational split-dollar arrangement under IRC §§2036, 2038, and 2703 (among other provisions). While this case may not break new ground in those areas, it shows the trend of the…
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Donors of conservation easements have just been put on notice by the Tax Court. Frequently, donors of conservation easements (or related parties) own nearby property. The Tax Court recently denied a deduction for a conservation easement where, without any expert opinion, it determined there was an expectation that contiguous property would increase in value. It…
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In a case with some very interesting legal issues (at least “the kind of conundrum only tax lawyers love”), the IRS is denied penalties for failing to produce the signature of a supervisor. The Tax court gave an early Christmas present to a handful of taxpayers including the Estate of Michael Jackson and Warren Sapp (consolidated…
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Yet again, a taxpayer loses for not properly and contemporaneously documenting his intentions. Here is another lesson on the importance of properly documenting loans (i.e. don’t just “book” as loans but have written loan documents contemporaneous with the advance). Mr. Burke made a number of advances to a business operated by his friend. Although the…
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The IRS published an Information Release on February 21, 2018 clarifying that certain home loan mortgage interest deductions many thought were lost under the new tax act may still be deductible. The Tax Cuts and Jobs Act of 2017 (“TCJA”), which was enacted on December 22, 2017, suspends from 2018 until 2026, any deduction for…
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The Trump era brings about changes to the world of tax law and many planning opportunities. But with it, many unintended consequences may require people to review their current plans. In doing so, people might find that there are opportunities which could significantly lower their tax bills. On December 22, 2017, the Tax Cuts and…
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