Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, December 14, 2017

The Finance 202: Senate to Draw Red Line on Estate Levy as Part of Tax Negotiations

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-12-14/92dd7887-6a01-4b17-b7b1-3f779bba837d.pngThe tumultuous travels of the tax reform bill are not quite yet at an end. House Republicans have drawn the proverbial line in the sand regarding the estate tax. They are pushing for full repeal while the Senate is only willing to double the exemption limits. Republican leaders may note this split as a nonstarter, as the margin for error in the Senate is extremely thin. As it stands, the Senate can only lose two votes and still manage to pass the bill. Sen. Susan Collins (R-Maine) highlighted this issue in a statement while on CBS’s “Face the Nation”: “I always wait until the final version of the bill is brought before us, before I make a final decision on whether or not to support it. There are major differences between the House and Senate bills. And I don't know where the bill is going to come out.”

See Tory Newmyer, The Finance 202: Senate to Draw Red Line on Estate Levy as Part of Tax Negotiations, The Washington Post, December 11, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

December 14, 2017 in Current Events, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Wednesday, December 13, 2017

Restructured Tax Code Would Unduly Burden People with Disabilities

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-12-13/09f69b23-4407-4aeb-aec5-979677f8c03f.pngIn its current form, the tax bill would have some negative implications for those with spinal cord injuries and other disabilities. The version of the tax bill passed by the House eliminates a widely used deduction utilized by millions, including thousands with severe spinal injuries. Under the plan, many currently deductible expenses will disappear. This includes costs like purchasing a wheelchair, physical therapy, and prosthetics. In addition, the bill gets rid of tax credits offered to small businesses for making their establishments more accessible to the disabled.

See Peter Wilderotter, Restructured Tax Code Would Unduly Burden People with Disabilities, The Hill, November 24, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

December 13, 2017 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Tuesday, December 12, 2017

GOP Laying Groundwork to Cut Future Social Security, Medicare, Welfare Outlays

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-12-12/ecfc6c0e-a5dd-46d1-9947-2bad89d00864.pngAccording to President Trump, reductions to Medicare, Social Security, and welfare are his next major task after tax reform. His plan is for changes to “take place right after taxes, very soon, very shortly after taxes.” The aggregate outlay for these programs was in excess of $700 billion in 2016. GOP leaders have pushed the point that cuts to these entitlement programs are needed in order to reduce the deficit and to accommodate upcoming changes to the tax code, which works to reduce government revenue by up to $1.5 trillion over the next decade. Sen. Marco Rubio (R-Fla.) recently discussed the issue at an event sponsored by the Financial Services Foundation: “We don’t need to reduce benefits on current retirees or even near-term retirees, but we can make changes for future generations such as mine, and do so in a way that people can prepare for, so the changes will barely be felt.”

See Tracey Longo, GOP Laying Groundwork to Cut Future Social Security, Medicare, Welfare Outlays, Financial Advisor, December 6, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

December 12, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Sunday, December 10, 2017

US Senate Passes Tax Reform Legislation – Here Is What You Need to Know

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-12-10/6584bca4-ca98-4f41-8995-c47261bb41fa.pngOn Saturday, December 2, the Senate pushed through its version of tax legislation that is poised to represent some of most sweeping legislation the tax code has endured in a generation. The bill squeezed past by a narrow 51-49 margin, with Sen. Bob Corker (R-TN) and every Democrat voting against the bill. Leaders in both houses are soon expected to start conferencing their versions of the bill. The apparent goal for the House and the Senate is to put a finalized version of tax legislation on President Trump’s desk before Christmas.

See Tax Strategy and Benefits Practice Group, US Senate Passes Tax Reform Legislation – Here Is What You Need to Know, The National Law Review, December 4, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

December 10, 2017 in Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, New Legislation | Permalink | Comments (0)

Sunday, December 3, 2017

Rubio: Offset Tax Cuts By Reducing Social Security, Medicare Benefits

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-12-02/54511ba5-f1fd-4f7c-b9e5-3ecf20d8fe22.pngSen. Marco Rubio (R-Fla.) discussed tax reform in front of an audience of political analysts and lobbyists this past Thursday. He commented on the need for increased economic growth along with a reduction in spending, which “will mean instituting structural changes to Social Security and Medicare” in the future. Rubio pressed the issue, saying that we “don’t need to reduce benefits on current retirees or even near-term retirees, but we can make changes for future generations such as mine, and do so in a way that people can prepare for, so the changes will barely be felt[.]”

See Tracey Longo, Rubio: Offset Tax Cuts By Reducing Social Security, Medicare Benefits, Financial Advisor, November 29, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

December 3, 2017 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Wednesday, November 29, 2017

Fiscalini v. Commissioner: Court Finds Part Gift Part Sale in Home Transfer

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-11-29/3ba8f6d0-4951-441b-97c5-55f409433642.pngIn Fiscalini v. Commissioner, the Tax Court examined three issues: 1) was the petitioner required to recognize some long-term capital gain on the sale of his home, 2) was he liable under section 6651(a)(1) for the addition to tax, and 3) was the petitioner liable under 6662(a) for the accuracy-related penalty. The court held in the affirmative for all three issues.

See Lewis J. Saret, Fiscalini v. Commissioner: Court Finds Part Gift Part Sale in Home Transfer, Wealth Strategies Journal, August 28, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

November 29, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Saturday, November 25, 2017

Should You Insure Against an Inheritance Tax Bill? This Is What It Costs

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2017-11-24/ee832791-2e48-413a-8ac5-bd5c11b44197.pngUK families are becoming increasingly inventive in their efforts to thwart the ever-unsatisfied taxman. This is especially true as the inheritance tax is bringing in record levels of funds to Her Majesty's Revenue and Customs (HMRC). As part of this avoidance effort, some have turned to purchasing life insurance policies to help their beneficiaries pay taxes due after their demise. There are a number of plans available depending on need, but they each come with potential risks. It is best to seek out the advice of an estate or financial planner to determine what plan is best for you.

See Sam Brodbeck, Should You Insure Against an Inheritance Tax Bill? This Is What It Costs, The Telegraph, September 2, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

November 25, 2017 in Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax, Trusts | Permalink | Comments (0)

Thursday, November 16, 2017

Employer's Failure to Deduct 401(k) Loan Payments from Employee's Pay While on Leave Resulted in Taxable Distribution

MW-FW217_health_20171013071455_ZHLouelia Frias borrowed $40,000 from her 401(k) plan prior to going on maternity leave. Glen Island, the company at which she worked, agreed to deduct set amounts from Frias’s check to pay down the loan. During Frias’s maternity leave, Glen Island failed to deduct the agreed-upon amount from her checks which caused Frias to be in violation of the loan agreement. Once Frias became aware of the deficiency, she immediately repaid the loan amount. Despite this and in light of the violation, the IRS took the position that a distribution had taken place. Though Frias was not at fault, the court held that she owed $15,000 in taxes on funds that she had repaid in full to her 401(k).

See Ed Zollars, Employer's Failure to Deduct 401(k) Loan Payments from Employee's Pay While on Leave Resulted in Taxable Distribution, Current Federal Tax Developments, July 12, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

November 16, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Tuesday, November 14, 2017

CLE on Tax Strategies for Estate, Retirement and Financial Planning

0000000 CLEThe National Business Institute is holding a conference entitled, Tax Strategies for Estate, Retirement and Financial Planning, which will take place on Thursday, November 16, 2017, at the Best Western Plus North Haven Hotel in North Haven, CT. Provided below is a description of the event:

Program Description

Effective Tax Strategies for Trusts, Estates and Individuals

Expand your arsenal of tax planning tools with the latest and most effective techniques! Experienced faculty will guide you through basis enhancing strategies, asset protection mechanisms, recent tax planning trends, regulatory updates and more in this comprehensive seminar. Protect your clients from undue tax burdens from cradle to grave - register today!

  • Gain practical wealth transfer techniques to minimize both estate and income tax liabilities.
  • Protect your clients from tax penalties and attacks.
  • Make the best use of partnerships and LLCs and comply with the latest rules governing them.
  • Find charitable solutions to top estate planning problems.
  • Maximize your clients' retirement assets and get tools for their tax-efficient transfer to beneficiaries.
  • Clarify how rules of professional conduct are applied in tax practice.

Who Should Attend

This basic-to-intermediate level seminar is designed for:

  • Attorneys
  • Accountants and CPAs
  • Financial Planners
  • Trust Officers
  • Tax Professionals
  • Paralegals

Course Content

  1. Top Lifetime Transfer Strategies to Reduce Taxes
  2. Valuation of Assets: How to Protect Clients from Tax Penalties
  3. Using LLCs and Partnerships (Pass-Through Entities) to Your Client's Advantage
  4. Tax Strategies in Retirement Planning
  5. Defensive Wealth Planning Techniques - Protecting Against Creditors and the IRS
  6. Tax Regulatory Update
  7. Trusts: Top Designs for Tax Reduction
  8. Legal Ethics in Tax Practice
  9. Charitable Giving as a Tax Tool
  10. Cross-Border Tax Issues Every Estate Planner Needs to Know

Continuing Education Credit

Continuing Legal Education – CLE: 6.50 *

Financial Planners – Financial Planners: 8.00

International Association for Continuing Education Training – IACET: 0.70

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 8.00 *

* denotes specialty credits

November 14, 2017 in Conferences & CLE, Estate Planning - Generally, Income Tax, Professional Responsibility, Trusts | Permalink | Comments (0)

Friday, November 10, 2017

Divorce And Taxes: How GOP Plan Could Make Splitting Up Costlier

Cheap-divorce-couponDivorce is often an ugly, bitter affair. Court-ordered alimony payments from one spouse to the other offer a monthly reminder of a tumultuous past and a bitter end to a once-happy marriage. A very dull silver lining to making these payments is that each dollar paid reduces taxable income by an equivalent amount. The GOP’s proposed section 1309 of the new tax bill would eliminate this deduction. Jacqueline Newman, New York divorce attorney said, “I’m just praying this does not go through. For many people in different income brackets, this is going to be horrible.”

See Tom Metcalf and Christie Smythe, Divorce And Taxes: How GOP Plan Could Make Splitting Up Costlier, Financial Advisor, November 9, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

November 10, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)