As tax planning practitioners, we do not typically see issues we deal with daily become the subject of cases before the United States Supreme Court. This term, we had the Connelly[1] case involving estate tax valuation of a decedent’s stock in a corporation funding a redemption buy-sell with corporate-owned insurance. Shortly thereafter, the Supreme Court…
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Under IRC §121, gain on the sale of a principal residence of up to $250,000 (or $500,000 for spouses, see below) may be excluded from gross income. This may seem pretty straightforward, and many times it is, but it also has numerous requirements in order to apply, as well as numerous exceptions that may apply.…
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In a previous writing, I discussed the potential of an executor to be personally liable for a decedent’s tax obligations.[1] That discussion was based on lessons learned from a Tax Court opinion,[2] outlining certain steps for executors to consider in minimizing exposure to such personal liability. In 2023, in a split decision, the Ninth Circuit…
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On February 8, 2024, the Mississippi Supreme Court issued its opinion[1] regarding an issue of first impression regarding Mississippi’s Principal and Income Act of 2013 (the “Act”).[2] As a worthwhile note, the Court noted that this is an issue of first impression and acknowledged as well as appeared to oblige the parties so as to…
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A line from President Abraham Lincoln’s second inaugural address on March 4, 1865, “To care for him who shall have borne the battle and for his widow, and his orphan,” was the mission statement for the U.S. Department of Veterans Affairs (“VA”) for decades. The VA offers many different benefits to those who served in…
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Small businesses predominate the United States.[1] Many of those businesses operate through entities taxed as partnerships.[2] Those entities may be general partnerships, limited partnerships, LLC’s, or other state law entity types.[3] Many partnerships are formed as part of family and estate planning. Some benefits of the use of partnerships in estate planning include, but are…
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Split dollar life insurance arrangements can take on a number of forms, and the exact structure of the arrangement determines the tax consequences, which can become complicated quickly. In a recent case out of the District Court of Ohio, the court held that an insurance arrangement between a single member C corporation, Peter E. McGowan…
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Shortly before his passing, Benjamin Franklin uttered one of his more infamous quotes, “In this world, nothing is certain except death and taxes.” With the certainty of death implicitly comes another: everyone will transfer his or her wealth, whether in life or after death. How a person transfers wealth will affect how the other certainty,…
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Recently, an attorney friend of mine involved in a family legal matter concerning trust administration called to ask me what probably seemed like a simple question – is a trust a legal entity? The point of the question related to procedural aspects of trust administration, issues involving duties of the attorney involved, and related considerations.…
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Taxpayers who are issued a notice of deficiency by the Internal Revenue Service (“IRS”) have ninety (90) days from the date such notice of deficiency is mailed to file a petition with the Tax Court for a redetermination of the deficiency.[1] Last year, the Tax Court dismissed several cases for lack of jurisdiction when the…
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