The district court decision in Badgley v U.S. (ND Cal, May 17, 2018, No. 17–cv-00877–HSG) 2018 US Dist Lexis 83537 confirms what we have long believed: The value of a grantor retained annuity trust (GRAT) is included in the grantor’s estate if the grantor dies during the term of the retained annuity interest. Continue reading
The following is a guest post from Ed Lyman, a trial and appellate attorney at Walzer Melcher LLP who handles complex dissolution of marriage and domestic partnerships for high net worth individuals.
Family law attorneys and accountants are struggling to grasp the impact of the GOP’s tax overhaul on divorces. The biggest changes that affect divorcées is the repeal of various deductions, the creation of new ones, large tax cuts for business entities, and eliminating many exemptions. These changes require special attention when calculating alimony, child support, and division of marital assets. Continue reading
Under new IRC §199A, business entity owners may be able to deduct 20 percent of passthrough income. This tax boon, which is set to sunset after December 31, 2025, has many lawyers wondering whether they might personally benefit.
The corporate tax cut is permanent, but most individual provisions of the Tax Cuts and Jobs Act (Pub L 115–97, 131 Stat 2054) are set to expire for tax years beginning after December 31, 2025. These expiring provisions will tax the ingenuity and patience of estate planners and their clients. What to do? Continue reading
How much is a fictitious brokerage account worth, and what happens when it loses value? The IRS and the Tax Court have struggled with issues arising from the Bernie Madoff scandal. The answer may depend on when (and how) you ask the question. Continue reading
The following is a guest blog post by Jacob Stein, a partner with Klueger & Stein, LLP in Los Angeles. Mr. Stein practices international taxation and structures cross-border business transactions.
An increasing number of Americans are opting for an expatriate life. In fact, as MSN reports, more Americans than ever have renounced their U.S. citizenship in the first quarter of 2015. Moving abroad and getting a new citizenship may cut off the U.S. government’s ability to recover taxes from the expat because the U.S. will no longer have personal jurisdiction over that person. That’s where the “exit tax” comes into play—the expatriation rules of the Internal Revenue Code seek to extract a tax while the U.S. still has jurisdiction. Continue reading
Many are familiar with section 529 college savings accounts, from which tax-free distributions must be used for qualified higher education expenses. The “Achieving a Better Life Experience Act of 2014” or the “ABLE Act of 2014” adds a similar account under IRC §529A that individuals who become severely disabled before age 26 may establish to use for “qualified disability expenses,” which can include education, housing, and transportation. Continue reading
Updated 2/2/18: Under new IRC §199A, owners of passthrough entities including a law practice organized as a partnership or professional corporation may deduct 20 percent of qualified business income, excluding reasonable compensation for the business owner. No deduction is allowed for passthrough income from personal services, including legal services, and the deduction is limited to 50 percent of wages paid to employees, but these limitations are phased in above an individual income threshold ($157,500 for single taxpayers, $315,000 for married taxpayers filing jointly). Taxpayers below the income threshold may deduct 20 percent of law practice income derived from the services of paralegals, associates, and other employees.
You’ve decided to open your own law office and are ready for your clients’ cases, but are you also ready to handle the tax issues that go hand-in-hand with running your own business? Continue reading
The tragic death of actor Philip Seymour Hoffman has given us an opportunity to consider his estate planning, with lessons and strategies for the rest of us. Continue reading