Articles Posted in Tax

The insured buy-sell agreement is a good solution to the problem of close corporation management continuity. No other plan carries with it the same degree of assurance that the purposes of the plan will be achieved. The plan is simplicity itself. Under it, the stockholders enter into a binding buy-sell agreement among themselves. They contract…

A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of your minor children after your death. If you’re like millions of Americans, a will is among the most important legal documents that you will ever sign. When you create a will, you will be…

Usually, when a taxpayer transfers assets to an irrevocable trust for the benefit of another person, the transferor pays gift tax on the full value of the property transferred to the trust. However, in some cases, the value of an interest in the trust that is retained by the transferor (the “grantor”) may be subtracted…

A charitable remainder trust is an irrevocable trust wherein the grantor/donor can effectively sell appreciated assets without immediate capital gains taxes, increase current cash flow, generate a current income tax charitable deduction, and ultimately reduce estate taxes. Typically, a charitable remainder trust provides that the non-charitable beneficiary (the grantor) receives payments, at least annually, during…

A qualified disclaimer is an irrevocable and unqualified refusal to accept an interest in property. Because the system of wealth transfer taxation in the United States (i.e., the federal estate, gift, and generation-skipping transfer tax) operates to impose a tax on the privilege of transferring property, the punch-line about disclaimers, for purposes of those wealth…

If you are a citizen or resident of the United States, you must file a gift tax return (whether or not tax is due) if you gave gifts to someone in 2020 totaling more than $15,000 (other than to your spouse). Certain gifts, called future interests, are not subject to the $15,000 annual exclusion and…

While virtually every American is familiar with the federal income tax, the U.S. Internal Revenue Code contains another system of taxation related to individual wealth: the taxation of the passage of wealth through gratuitous transfers of property by individuals. This overall area of federal taxation is embodied in three separate, but interrelated “taxes”: the estate…

In a common law state (like New York State), an individual whether married or single, is a separate individual with separate legal rights to property and separate tax obligations. Common law states are typically referred to as “separate property” states. In a community property state (like California) a married couple each owns an undivided one-half…

A traditional Individual Retirement Account (IRA) is subject to rules that require withdrawals, known as Required Minimum Distributions (RMDs) at age 72. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (‘‘CARES Act”) was enacted in response to the coronavirus pandemic. Under the CARES Act, RMDs for IRAs are waived for calendar…

It is important to review your estate plan at regular intervals. While every family situation is different, it is generally advisable to review your estate plan at least every three to five years or sooner if any of the following events are applicable to your situation: Reviewing your estate plan regularly (and when major life…