Andrew Bernknopf
Cross-border tax issues add an extra layer of complexity to estate and wealth-transfer planning. This article is the first in a series that addresses United States estate, gift and income tax planning for international families with members in the U.S.
1. Differences in Estate, Gift and GST Tax Rules Mean Different Planning for
U.S. Citizens and U.S. Residents Than for U.S. Nonresidents
Introduction. After applicable exemption amounts, the United States imposes the following wealth-transfer taxes:
(1) estate tax on the net value of a decedent’s estate;
(2) gift tax on gifts made during lifetime (including funding of irrevocable trusts); and
(3) generation skipping tax (“GST”) on gifts and trust transfers to grandchildren or others two or more generations below the donor. read more…
Share this article
Jonathan Reich
Effective January 1, 2012 the amount of a decedent’s property that may be administered under Probate Code Sections 13100 and 13151 without procuring letters of administration and without a formal probate will increase from $100,000 to $150,000.
Share this article
Michael C. Cohen
Michael Cohen recently spoke to the Pasadena Discussion Group of the California Society of CPAs concerning “Recent Developments in Tax Enforcement.” Topics covered included the IRS’s 2011 Offshore Voluntary Disclosure Initiative, developments in the ongoing saga of whether the six-year statute of limitations applies to basis overstatements and recent cases where the IRS was unsuccessful in imposing transferee liability on a tax shelter participant.
Share this article
Jonathan Reich
1. Interpretation of Trusts and Wills:
Estate of Cairns, 188 Cal.App.4th 937 (1st Dist. Sept. 15, 2010) – In construing a trustor’s intent under a trust, a liberal construction is permissible where there is a lack of conflicting evidence. read more…
Share this article
Jordan Chodorow
California sellers of fine art, beware! California law contains an exceptional provision at Section 986 of the California Civil Code called the California Resale Royalties Act. Enacted in 1976, the Act provides that whenever a work of fine art is sold and the seller resides in California or the sale takes place in California, the seller or his agent must pay to the artist a royalty of five percent (5% ) of the sale price. Below are some common questions and answers about the Act. read more…
Share this article
Michael Abrams
Michael Abrams enjoys the pain of running 26.2 miles. The photo above shows Michael (in black, bib # 5912) crossing the finish line at the 2011 Utah Valley Marathon in 4:01:44 in downtown Provo. This beautiful race course includes Provo Canyon and features much of Utah County’s diverse scenery, including canyon roads that follow the Provo River, with spectacular views of Bridal Veil Falls, the mountains, and the city.
Share this article
Judianne Jaffe
The California Second District Court of Appeal, Division 3, has decided a “case of first impression” about how to determine the amount of the buyout payment to a dissociating lawyer who leaves a limited liability partnership, in the absence of an agreement among the partners. Rappaport v. Gelfand [cite]. read more…
Share this article
IRS Loses Transferee Liability Cases
Michael Cohen
On March 15, 2011, the Tax Court issued opinions in two cases, Starnes and Griffin, which involved a similar set of facts and issues. In both cases, the taxpayer was an entrepreneur who had sold the assets of his C corporation business to an unrelated party for a significant profit. The taxpayer then sold the stock of the corporation to Midcoast Investments for an amount less than the value of the assets remaining in the corporation, but more than the net value of the assets that would remain after the corporation paid tax on the gain from the sale of its assets. (This is a version of the “midco” transaction that the IRS has determined is a “listed transaction.”) As the new owner of the business, Midcoast then had the corporation enter into a tax shelter transaction to generate a tax loss offsetting the corporation’s profit so that it filed a tax return showing no tax liability. read more…
Share this article
Private Foundations
Henry A. Reitzenstein
The use of a private foundation as a vehicle for charitable giving has most often been associated with families of great wealth. However, a private foundation should be considered in estate and income tax planning by people of more moderate means. [1]
A private foundation establishes a legacy of giving that can carry the family name and enable its founders to involve the family in philanthropy and pass values on to future generations. Private foundations also provide their founders with control over their planned giving. The foundation and other family members (as directors of the foundation) determine the charities and causes to support and the investment of endowment funds. read more…
Share this article
Update on IRS Targeting of Foreign Bank Accounts…or, Is it OK to Keep Hiding Under a Rock?
Michael J. Cohen
The IRS is continuing on its well-publicized campaign to crack down on US taxpayers who use foreign bank accounts and foreign entities to hide income. Below is a brief summary of what’s happened to this point, where we are now, and what’s likely to happen in the future. The bottom line: US taxpayers with undeclared foreign accounts and interests in foreign entities are subject to an ever-tightening web of enforcement, with the likelihood of detection by the IRS dramatically increasing over the next few years. The IRS is now offering an opportunity for such taxpayers to “come clean.” While it will inflict some financial pain, the IRS offer should, in consultation with counsel, be given serious consideration. read more…
Share this article
Like us on Facebook
Follow us on Twitter
Connect on LinkedIn
Subscribe to RSS Feed