Introduction Generally, a taxpayer may deduct the fair market value of appreciated property donated to a qualified charitable organization.[1] This provision expands the benefits available to taxpayers with respect to charitable deductions. The result, in effect, is that a taxpayer may gift an appreciated asset in lieu of selling the asset, paying tax, and then…
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In a recent Tax Court opinion, the Court granted the IRS’ motion for summary judgment holding that a state law Nonprofit corporation could not election to be treated as S corporation for federal income tax purposes.[1] Clinton Deckard attempted to make an S election for Waterfront Fashion Week, Inc., a Nonprofit corporation organized under the…
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As of September 14, 2020, Devin Mills joins Edmondson Sage Allen, PLLC as an associate attorney. Prior to working at Edmondson Sage Allen, PLLC, Devin was an associate practicing in tax and estate planning with Baker Donelson in its Jackson, Mississippi office. Devin received his law degree from the University of Mississippi and completed his…
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Anyone looking outside their window (or watching TV) recently knows that we are in a volatile time. Among other things, current volatility results from the ongoing COVID-19 pandemic, an uncertain economy,[1] and upcoming elections. The effects of this include large amounts of government spending,[2] low interest rates,[3] and a reduction of the value of a…
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Here we are coming upon the fourth anniversary of the one of the most shocking nights of our country since perhaps the Battle of Saratoga and one of the largest cash outlays by our government ever known by means of the CARES Act. On the heels of these events Democrats are setting the stage to…
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In a recent opinion out of the United States Court of Appeals for the Seventh Circuit, the Court upheld the Tax Court’s ruling that cash payments made from a family owned company to the son of the founder were not bona fide debts, and thus not deductible as bad debt expenses.[1] Additionally, the Court sided…
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In trust planning, it is common that a trust beneficiary is appointed as trustee. A lot of confusion surrounds the consequences of appointing a beneficiary as his or her own trustee. On one hand, I have heard people say it is not allowed to have a beneficiary serve as trustee. On the other hand, I…
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It is not uncommon for a property owner to experience a large loss on the sale of a piece of property. It is also not uncommon that an issue exists regarding character of the loss and whether the asset sold was a capital asset or a business asset used in carrying on a trade or…
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It’s common knowledge among tax practitioners that the IRS is not a fan of formula gift clauses that attempt to pin the amount of the gift to a dollar figure such that the actual gift is adjusted in the event of a successful valuation challenge by the IRS.[1] However, in a recent Tax Court case,…
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As a basic matter, creditors of a trust beneficiary generally do not have access to assets of the trust.[1] The primary exception is that creditors generally can access trust assets distributable to the settlor of the trust, such a trust being considered “self-settled.”[2] Many states have abolished this exception for trusts that satisfy certain statutory…
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