Berdon Blogs

TAX TALK: Weigh the Tax Consequences before Gifting Loved Ones

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 22, 2018 9:20:00 AM

Many people choose to pass assets to the next generation during their lifetime, to reduce the size of their taxable estate, to help out family members, or simply to see their loved ones enjoy the gifts. If you’re considering lifetime gifts, be aware that which assets you give can produce substantially different tax consequences.

Multiple Types of Taxes

Federal gift and estate taxes generally apply at a rate of 40% to transfers in excess of your available gift and estate tax exemption. Under the Tax Cuts and Jobs Act, the exemption has approximately doubled through 2025. For 2018, it’s $11.18 million (twice that for married couples with proper estate planning strategies in place).

Even if your estate isn’t large enough for gift and estate taxes to currently be a concern, there are income tax consequences to consider. Plus, the gift and estate tax exemption is scheduled to drop back to an inflation-adjusted $5 million in 2026.

Read More

Topics: TAX TALK

T&E TALK: A Qualified Disclaimer Lets Assets Bypass Your Estate

Posted by Scott T. Ditman, CPA/PFS on Oct 22, 2018 7:00:00 AM

If you are about to receive an inheritance from a family member, you can use a qualified disclaimer to refuse the bequest. The assets will then bypass your estate and go directly to the next beneficiary in line. It’s as if the successor beneficiary, not you, had been named as the beneficiary in the first place.

But why would you ever look this proverbial gift horse in the mouth? For beneficiaries who already have large estates themselves, using a legally valid disclaimer can save gift and estate taxes, often while redirecting funds to where they ultimately would have gone anyway.

Read More

Topics: T&E TALK

SALT TALK:  “The Truth Will Set You Free” – New Jersey Amnesty Edition

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Oct 15, 2018 12:00:00 PM

The title of this week’s post is frequently attributed or misattributed to the twentieth President of the United States, James Abraham Garfield (As he pulled it from the Bible). Regardless of who said it first, I find it very relevant as applied to the smorgasbord of voluntary disclosure programs offered by the various state and local taxing jurisdictions. For those of you old enough to remember smorgasbords (current translation is “the cocktail hour”), while many of the offerings seem identical, like the various voluntary disclosure programs, it is essential to be aware of the specifics of what is being offered up.

Read More


T&E TALK: Educate your Children on Wealth Management

Posted by Scott T. Ditman, CPA/PFS on Oct 15, 2018 9:20:00 AM

If you’ve worked a lifetime to build a large estate, you undoubtedly would like to leave a lasting legacy to your children and future generations. Educating your children about saving, investing and other money management skills can help keep your legacy alive.

Teaching Approaches

There’s no one right way to teach your children about money. The best way depends on your circumstances, their personalities and your comfort level.

If your kids are old enough, consider sending them to a money management class. For younger children, you might start by simply giving them an allowance in exchange for doing household chores. This helps teach them the value of work. Opening a savings account or a CD, or buying bonds, can help teach kids about investing and the power of compounding.

Read More

Topics: T&E TALK

TAX TALK: Tax-free Fringe Benefits Help Retain Best Employees

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 15, 2018 7:00:00 AM

In today’s tightening job market, to attract and retain the best employees, small businesses need to offer not only competitive pay, but also appealing fringe benefits. Benefits that are tax-free are especially attractive to employees. Let’s take a quick look at some popular options.


Businesses can provide their employees with various types of insurance on a tax-free basis. Here are some of the most common:

Health Insurance. If you maintain a health care plan for employees, coverage under the plan isn’t taxable to them. Employee contributions are excluded from income if pretax coverage is elected under a cafeteria plan. Otherwise, such amounts are included in their wages, but may be deductible on a limited basis as an itemized deduction.

Read More

Topics: TAX TALK

SALT TALK:  California’s Minimum Franchise Tax – Now One is No Longer the Loneliest Number

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Oct 8, 2018 11:30:00 AM

It was one of those days where I remember exactly where I was and what I was doing. February 28, 2017 is etched forever in my mind as the day the California Franchise Tax Board (“FTB”) released FTB Notice 2017-01. My heart was warmed over (or maybe it was just that it was 58 degrees in New York at the end of February) by the fact that the FTB saw the light and decided to follow the law.

For the uninitiated, California is notorious for grabbing the $800 minimum franchise tax (plus interest and penalties) from unsuspecting “taxpayers” whose only contact with California is a deminimus interest in a partnership or LLC. I outlined the typical scenario in my March 6, 2017 blog ( to commemorate the release of the Notice.

Read More


TAX TALK: Charitable IRA Rollovers may be Especially Beneficial in 2018

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 8, 2018 9:20:00 AM

If you’re age 70½ or older, you can make direct contributions — up to $100,000 annually — from your IRA to qualified charitable organizations without owing any income tax on the distributions. This break may be especially beneficial now because of Tax Cuts and Jobs Act (TCJA) changes that affect who can benefit from the itemized deduction for charitable donations.

Counts toward your RMD

A charitable IRA rollover can be used to satisfy required minimum distributions (RMDs). You must begin to take annual RMDs from your traditional IRAs in the year you reach age 70½. If you don’t comply, you can owe a penalty equal to 50% of the amount you should have withdrawn but didn’t. (Deferral is allowed for the initial year, but you’ll have to take two RMDs the next year.)

So if you don’t need the RMD for your living expenses, a charitable IRA rollover can be a great way to comply with the RMD requirement without triggering the tax liability that would occur if the RMD were paid to you.

Read More

Topics: TAX TALK

T&E TALK: Retiring Abroad? Review your Estate Plan in Advance

Posted by Scott T. Ditman, CPA/PFS on Oct 8, 2018 7:00:00 AM

If you dream of spending your golden years in a tropical paradise, a culture-rich European city or another foreign locale, it’s important to understand the potential tax and estate planning implications. If you don’t, you could be hit with some unpleasant surprises.

Avoiding the Pitfalls

If you’re a citizen of the United States, U.S. taxes will apply even after you move to another country. So, if your estate is large, you might be subject to gift and estate taxes in your new country and in the United States (possibly including state taxes if you maintain a residence in a U.S. state). You also could be subject to estate taxes abroad even if your estate isn’t large enough to be subject to U.S. estate taxes. In some cases, you can claim a credit against U.S. taxes for taxes you pay to another country, but these credits aren’t always available.

Read More

Topics: T&E TALK

SALT TALK: Let’s Chart a Course

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Oct 1, 2018 11:30:00 AM

As a kid, I always loved to look at maps and still do. GPS devices of all kinds have eliminated the need to consult with the paper monsters thereby eliminating the required graduate degree in Origami[1] to return the map to its original neatly folded state.  The need to consult a map to get from here to anywhere is gone.

Map lovers do not fret. The paper might be gone from the equation, but the internet provides us with the ability to look at anywhere in the world at any time.

What does any of this have to do with state and local tax, other than this author indulging his sense of humor? Well, in charting a course to a state and local tax planning strategy, some see it as nothing more than a chart. As all practitioners know, we are often asked to boil down complex issues to chart form. With the ability to generate a so-called custom chart from one of the various research services, the temptation and the pressure to chart your course becomes overwhelming at times.

Read More


TAX TALK: TCJA Made Tax Planning for Investments More Complex

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 1, 2018 9:20:00 AM

For investors, fall is a good time to review year-to-date gains and losses. Not only can it help you assess your financial health, but it also can help you determine whether to buy or sell investments before year end to save taxes. This year, you also need to keep in mind the impact of the Tax Cuts and Jobs Act (TCJA). While the TCJA didn’t change long-term capital gains rates, it did change the tax brackets for long-term capital gains and qualified dividends.

For 2018 through 2025, these brackets are no longer linked to the ordinary-income tax brackets for individuals. So, for example, you could be subject to the top long-term capital gains rate even if you aren’t subject to the top ordinary-income tax rate.

Old Rules

For the last several years, individual taxpayers faced three federal income tax rates on long-term capital gains and qualified dividends: 0%, 15% and 20%. The rate brackets were tied to the ordinary-income rate brackets.

Read More

Topics: TAX 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.

Subscribe to Berdon Blogs

Recent Posts