Articles Posted in Tax

An applicable credit is allowed against the New York state estate tax when a New York taxable estate is not greater than 105% of the Basic Exclusion Amount. The Basic Exclusion Amount in 2019 is $5,740,000. POINT 1 – If the New York taxable estate is less than or equal to the basic exclusion amount,…

The doctrine of constructive receipt is an important principle of income tax law, which reflects the point that income can be realized even though no cash or other tangible property or services have actually been received. Simply stated, if a taxpayer has an unqualified right to receive property or money which would constitute income, then…

Also known as the section 199A deduction it was part of the 2017 Tax Cuts and Jobs Act. Section 199A of the Internal Revenue Code provides a deduction for qualified business income from a qualified trade or business operated directly or through a pass-through entity. The deduction has two components. Component 1 – Eligible taxpayers…

If a deceased taxpayer was a party to a financial arrangement providing that income which he earned is to be paid after his death to his estate or his heirs, such income is referred to as “income in respect to a decedent” (“IRD”). Income which the taxpayer was unconditionally entitled to receive prior to his…

For a divorce completed in 2019 and later alimony payments will no longer be deductible and recipients of alimony will no longer include alimony payment in their taxable income. Under prior tax rules, spouses paying alimony could deduct alimony payments on their tax return and the recipient of alimony had to pay income tax on…

The Tax Cuts and Jobs Act nearly doubled the standard deduction. Thus, itemizing deductions will only makes sense if your total itemized deductions exceed the new standard deduction. In the 2018 tax year, the standard deduction for each filing status is: Single………………………………………………………………..$12,000 …….(was $6,350 in 2017) Married filing jointly. Qualifying widow(er) ………..$24,000 …….(was $12,700 in…

The primary purpose of using an irrevocable life insurance trust is to exclude the life insurance policy proceeds from estate taxation in the estate of the insured and the insured’s spouse. This can be accomplished even though the surviving spouse derives certain benefits from the trust while living. (The trust must be irrevocable, since property…

New York State has an estate tax on the transfer of property at death. New York State does not have a gift tax. But, since April 1, 2014, gifts made by N.Y. residents, within three years of death are “clawed back” (that is, they are brought back into the New York taxable estate and subjected…

Mr. Rice formed a trust for the benefit of his children in his home state, New York, and appointed a New York resident as the trustee. Under the terms of the trust the trustee has “absolute discretion” to distribute the trust’s assets to the beneficiaries. In 1997, Rice’s daughter, Kaestner, moved to North Carolina. North…