Articles Posted in Tax

The recent history of estate tax legislation demonstrates that the issue has become captive to political interests. There is no reason to expect an end to this situation. In this state of uncertainty, attention must be directed to techniques that ensure successful estate planning whether the estate tax exemption is $3.5 MM, $11.58 MM, or…

A stock purchase agreement (commonly referred to as a buy sell agreement) is an arrangement for the disposition of stock in the event of certain contingencies such as death, disability, retirement or the withdrawal of a shareholder from the business. Stock purchase agreements are useful when: Stock purchase agreements commonly take the form of either…

The Confusion Surrounding Joint Bank Accounts in New York is epic. In their article The Confusion Surrounding Joint Bank Accounts in New York, the authors, Francine R.S. Lee and Elisa Shevlin Rizzo write: “The problems associated with joint bank accounts have their roots in the beginning of the last century, when, in 1907, New York…

A trust is not taxed on income distributed in the year earned. Rather, the beneficiary who receives the income is liable for the tax. If the income is accumulated, the trust is taxed on the income. In addition, the beneficiary generally must pay tax on the income when it is distributed. The beneficiary does receive…

A “disclaimer” is a formal refusal by a donee of property (by gift or by will) to accept the gratuitous transfer. Though seemingly an unusual event, disclaimers are actually quite common, for a variety of reasons. For example, a wealthy widow who has no need for the additional property willed by her deceased husband may…

There are two kinds of taxes potentially owed by an estate: One on the transfer of assets from the decedent (the person who died) to their beneficiaries (the estate tax), and another on income generated by the assets held by the decedent’s estate (the income tax). This post discusses when an estate is required to…

Under Section 2503(e) of the Internal Revenue Code (the “Code”), tuition payments made directly to an educational organization on behalf of a person, and payments for a person’s medical care made directly to the provider are not treated as taxable gifts. For example, grandparents who already take full advantage of the annual exclusion for gifts…

Although the charitable remainder trust offers considerable potential tax advantages that can reduce the effective cost of charitable giving, the fact remains that a portion of the donor’s wealth will be going to charity and not to the donor’s heirs. This represents an obviously significant dilemma for a charitably inclined individual making estate planning decisions.…

In some cases, a lifetime gift is inappropriate, either because of the size of the prospective donor’s estate, the donor’s age, or the nature of the estate assets. It is important, therefore, to consider whether large gifts are contraindicated. Size of Estate an Important Factor Examples one sees of lifetime gifts commonly involve people of…

In connection with plans for minimizing taxes, it should be noted that there is nothing improper or immoral in reducing or avoiding taxes by lawful means. No apology is necessary for any legally acceptable plan that will enable you to minimize state and federal taxes. As long as the transaction is bona fide, as long…