Berdon Blogs

T&E TALK: An NCP Trust Enables You to Achieve a Variety of Goals

Posted by Scott T. Ditman, CPA/PFS on Aug 21, 2017 7:05:00 AM

Generally, trusts must have one or more human beneficiaries, but there’s an exception for certain “purpose” trusts. One type of purpose trust that you may be familiar with is the charitable trust. But don’t overlook the noncharitable purpose (NCP) trust as a potential tool for achieving your estate planning goals.

NCP Trust Defined

Historically, trusts were required to have human beneficiaries. Charitable trusts were the exception: The attorney general of the relevant jurisdiction was authorized to enforce the trust in the public interest.

Over the years, however, many U.S. states and a number of foreign jurisdictions have enacted legislation that authorizes NCP trusts. These trusts may be used to achieve a variety of purposes, such as: maintaining family residences, personal property, and gravesites and funding a family business.

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Topics: T&E TALK

SALT TALK: Mayor Proposes Outlaw Motorcycle Gangs Pay for Subway Improvements

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Aug 14, 2017 1:30:57 PM

The August 7, 2017 edition of the New York Magazine blog states “Bill de Blasio is asking one-percenters to save the subways.”  It’s well known that if you see a motorcycle club member wearing a patch that says 1%, you should certainly walk the other way as this is a reference to the statement often made that 99% of all motorcycle club members and riders are law abiding citizens. 

We all know I’m not referring to motorcycle gangs, but once again, New York City is going to the well of one-percenters to resolve its woes.  Just this year, the so called “millionaires tax” which was set to expire, was extended through the end of 2020 leaving New Yorkers with a top rate (not including the almost 4% New York City resident tax) of 8.82%.  The latest proposal seeks to place an additional burden on single taxpayers earning more than $500,000 and couples making over $1 million, by raising the top City rate to 4.4%

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TAX TALK: Will Congress Extend Expired Tax Breaks?

Posted by Hal Zemel, CPA, J.D., LL.M. on Aug 14, 2017 9:31:00 AM

Most of the talk about possible tax legislation this year has focused on either wide-sweeping tax reform or taxes that are part of the Affordable Care Act. But there are a few other potential tax developments for individuals to keep an eye on.

Back in December of 2015, Congress passed the PATH Act, which made a multitude of tax breaks permanent. However, there were a few valuable breaks for individuals that it extended only through 2016. The question now is whether Congress will extend them for 2017.

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Topics: TAX TALK

T&E TALK: Don’t Overlook Tax Apportionment in Your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Aug 14, 2017 7:00:00 AM

If you expect your estate to have a significant estate tax liability at your death, be sure to include a well-thought-out tax apportionment clause in your will or revocable trust. An apportionment clause specifies how the estate tax burden will be allocated among your beneficiaries. Omitting this clause, or failing to word it carefully, may result in unintended consequences.

Your  Options

There are many ways to apportion estate taxes. One option is to have all of the taxes paid out of assets passing through your will. Beneficiaries receiving assets outside your will — such as IRAs, retirement plans or life insurance proceeds — won’t bear any of the tax burden.

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Topics: T&E TALK

TAX TALK: A Refresher on the ACA’s Tax Penalty on Individuals without Health Insurance

Posted by Hal Zemel, CPA, J.D., LL.M. on Aug 7, 2017 11:45:00 AM

Now that Affordable Care Act (ACA) repeal and replacement efforts appear to have collapsed, at least for the time being, it’s a good time for a refresher on the tax penalty the ACA imposes on individuals who fail to have “minimum essential” health insurance coverage for any month of the year. This requirement is commonly called the “individual mandate.”

Penalty Exemptions

Before we review how the penalty is calculated, let’s take a quick look at exceptions to the penalty. Taxpayers may be exempt if they fit into one of these categories for 2017:

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Topics: TAX TALK

SALT TALK: Head in the Clouds?  You Might be Subject to Sales Tax

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Aug 7, 2017 9:30:00 AM

I may want you to get off my cloud, but that just might not be possible like it was back in 1965 when Mick Jagger and Keith Richards urgently begged their listeners to do so[1]. You see, those of you not old enough to remember the days when you had to buy software on tangible media (floppy disk, compact disc, or flash drive) and install it yourself may actually have your head in the clouds and not be aware that many jurisdictions are seeking to tax the cloud equivalent, often referred to as “software as a service (“SAAS”).

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T&E TALK: The Stretch IRA - A Simple Yet Powerful Estate Planning Tool

Posted by Scott T. Ditman, CPA/PFS on Aug 7, 2017 7:00:00 AM

The IRA’s value as a retirement planning tool is well known: IRA assets compound on a tax-deferred (or, in the case of a Roth IRA, tax-free) basis, which can help build a more substantial nest egg. But if you don’t need an IRA to fund your retirement, you can use it as an estate planning tool to benefit your children or other beneficiaries on a tax-advantaged basis by turning it into a “stretch” IRA.

Stretching the Benefits

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Topics: T&E TALK

TAX TALK: Don’t Wait for Year-End — Here are some Mid-Year Tax Planning Strategies

Posted by Thea Kruger, J.D., LL.M. on Jul 31, 2017 11:40:00 AM

In the quest to reduce your tax bill, year-end planning can only go so far. Tax-saving strategies take time to implement, so review your options now. Even though uncertainty hangs over the timing and content of potential tax reform legislation, you can still take steps now to minimize your tax burden. Here are three strategies that can be more effective if you begin executing them mid-year:

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Topics: TAX TALK

SALT TALK: Take My Tax . . . Please (California)

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jul 31, 2017 9:15:00 AM

I’ve addressed real estate transfer tax traps before (February 21, 2017, July 11, 2016, October 12, 2015, October 5, 2015) and the concept of the controlling interest transfer. Simply put, state real property transfer taxes used to be simple; if you transferred title to the property, the tax applied.  Life got more complicated and taxpayers got smarter.  What about the sale of a business that owns real property?  If the buyer were to purchase the existing business entity, the deed stays in the name of the existing business and no transfer tax would apply.  Clever property owners came up with the idea to put the property in a special purpose entity specifically to hold title to the property they wished to sell.  The buyer would purchase the entity, real property and all.  Under the old simplistic transfer tax statutes the tax wouldn’t apply.

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T&E TALK: ABLE Accounts for Loved Ones with Special Needs

Posted by Scott T. Ditman, CPA/PFS on Jul 31, 2017 7:15:00 AM

For families with disabled loved ones who are potentially eligible for means-tested government benefits such as Medicaid or Supplemental Security Income (SSI), estate planning can be a challenge. On the one hand, you want to provide the most comfortable life possible for your family member. On the other hand, you don’t want to jeopardize his or her eligibility for needed government benefits.

For many years, the most effective solution to this problem has been to set up a special needs trust (SNT). But beginning in 2014, the Achieving a Better Life Experience (ABLE) Act created Internal Revenue Code Section 529A, which authorizes the states to offer tax-advantaged savings accounts for the blind and severely disabled, similar to Sec. 529 college savings plans.

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Topics: T&E TALK

About Berdon Blogs

Our experts examine the latest trends, economics, business conditions and industry issues to provide timely information you need to maximize your tax advantages and meet your financial goals.

SALT TALK: Hear an insider’s perspective on the business issues, legislative updates in state and local tax, and tax aspects behind today’s headlines.

T&E TALK: Gain insights into how changes in tax laws, shifts in the financial markets, and regulatory concerns will impact assets and affect preserving and transferring wealth.

TAX TALK: Get an all-inclusive perspective on regulatory changes, industry issues, and trends from our team of multidisciplinary tax professionals – many of whom also hold J.D. and LL.M degrees.

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