Berdon Blogs

T&E TALK: Keeping a Trust a Secret Could Violate State Law

Posted by Scott T. Ditman, CPA/PFS on Mar 26, 2018 9:35:05 AM

If your estate plan includes one or more trusts, you may have a good reason for wanting to keep them a secret. For example, you may be concerned that, if your children or other beneficiaries knew about the trust, they might spend recklessly or neglect educational or career pursuits. Despite your good intentions, however, the law in many states requires trustees to disclose certain information to beneficiaries.

Disclosure Requirements

One example can be found in the Uniform Trust Code (UTC), which more than 20 states have adopted. The UTC requires a trustee to provide trust details to any qualified beneficiary who makes a request. The UTC also requires the trustee to notify all qualified beneficiaries of their rights to information about the trust.

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Topics: T&E TALK

SALT TALK: Stealing Bases–Which State will take the Lead?

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 19, 2018 12:27:35 PM

Taking a lead is not always a good thing. Case in point; yours truly playing Little League Baseball as a sixth grader, decides that after getting one of his few and far between singles, to stand way ahead of the comfort zone of first base, practically touching second. Those of you who know me, especially way back in sixth grade, know my nickname was never Flash, Mercury, Speedy Gonzales, or Hermes. You can guess the result, can’t you? The pitcher leisurely tossed the ball to the second baseman, who tagged me out without much fanfare.

Stealing the tax base, at least as perceived by state and local taxing authorities has resulted in similar outcomes for taxpayers as well as the taxing authorities, however usually with a great deal of fanfare and wasted dollars on both sides. As I read the Daily Tax Report one day last week,[1]
I thought for sure some jurisdiction tried to steal home by imposing a new tax on Major League Baseball. 

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TAX TALK: Casualty Losses Provide a 2017 Deduction, but Rules Tighten for 2018

Posted by Michael Eagan, J.D., LL.M. on Mar 19, 2018 9:09:45 AM

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. For 2018 through 2025, however, the Tax Cuts and Jobs Act suspends this deduction except for losses due to an event officially declared a disaster by the President.

What is a casualty? It’s a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. A casualty loss doesn’t include losses from normal wear and tear or progressive deterioration from age or termite damage.

Here are some things you should know about deducting casualty losses on your 2017 return:

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Topics: TAX TALK

T&E TALK: Four Estate Planning Tips for the “Sandwich Generation”

Posted by Scott T. Ditman, CPA/PFS on Mar 19, 2018 7:02:00 AM

The “Sandwich Generation” accounts for a large segment of the population. These are people who find themselves caring for both their children and their parents at the same time. In some cases, this includes providing parents with financial support. As a result, estate planning — which traditionally focuses on providing for one’s children — has expanded in many cases to include aging parents as well.

Including your parents as beneficiaries of your estate plan raises a number of complex issues. Here are four tips to consider:

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Topics: T&E TALK

SALT TALK:  Refund Claims – Don’t Make a Leap of Faith on What Difference a Day Makes

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 12, 2018 11:38:00 AM

Buzzing through the tax dailies every morning, one can’t help but notice the sad but frequently repeated stories of taxpayers being denied refund claims because of late filed returns. Usually I skip over them. Who wants to read about clerks testifying about mailing procedures, postmarks, blurred envelopes, and the like. As if Civil Procedure weren’t tedious enough, Tax Procedure adds an additional layer of monotony to the mix. I can’t get the image out of my head of a room full of tax attorneys and accountants counting days on their fingers and toes to make sure a refund claim is timely.

Something however made me stop and look at a recent New York City Tax Appeals Tribunal Opinion[1] addressing the timeliness of a Real Property Transfer Tax refund request. First, this is one of the most onerous taxes around, second, we deal with it frequently at Berdon, third it’s a Tax Appeals Tribunal decision (citable as precedent) and fourth, the statute of limitations to request a refund is only one year, while virtually every other tax provides a three year time frame.

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TAX TALK: Size of Your Charitable Deductions Depends on Many Factors

Posted by Michael Eagan, J.D., LL.M. on Mar 12, 2018 9:20:00 AM

Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on more than just the actual amount you donate.

Type of Gift

One of the biggest factors affecting your deduction is what you give:

Cash. You may deduct 100% gifts made by check, credit card, or payroll deduction.

Ordinary-income property. For stocks and bonds held one year or less, inventory, and property subject to depreciation recapture, you generally may deduct only the lesser of fair market value or your tax basis.

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Topics: TAX TALK

T&E TALK: Follow IRS Rules to Receive Your Charitable Income Tax Deductions

Posted by Scott T. Ditman, CPA/PFS on Mar 12, 2018 7:03:00 AM

If reducing your taxable estate is an important estate planning goal, making lifetime charitable donations can help achieve that goal and benefit your favorite organizations. In addition, by making donations during your lifetime, rather than at death, you can claim income tax deductions. But some of your charitable deductions could be denied if you don’t follow IRS rules.

Three Things to Know

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Topics: T&E TALK

SALT TALK:  Eating Warm Cookies in NYS Unhealthy (for your Bottom Line)

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 5, 2018 10:04:12 AM

Let’s face it: the human body and its interaction with food is a complex thing that we are far from completely understanding. One-day coffee is bad for you; the next day (today) it prevents dementia. Trying to keep up with what to eat is getting harder every day. My advice to you is to keep up with the latest independent studies (those whose primary researcher wasn’t Juan Valdez, the fictional character created in 1958 by the National Federation of Coffee Growers of Colombia) and apply a modicum of your own common sense. Keep your fingers crossed and hope for the best.

Should we be taking nutritional advice from the New York State Department of Taxation and Finance? I think not. 

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TAX TALK: Sec. 179 Expensing Provides Small Businesses with 2017 Tax Savings and More

Posted by Michael Eagan, J.D., LL.M. on Mar 5, 2018 9:58:56 AM

If you purchased qualifying property by December 31, 2017, you may be able to take advantage of Section 179 expensing on your 2017 tax return. You’ll also want to keep this tax break in mind in your property purchase planning, because the Tax Cuts and Jobs Act (TCJA) significantly enhances it beginning in 2018.

2017 Sec. 179 benefits

Sec. 179 expensing allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and most software in Year 1, subject to various limitations. For tax years that began in 2017, the maximum Sec. 179 deduction is $510,000. The maximum deduction is phased out dollar for dollar to the extent the cost of eligible property placed in service during the tax year exceeds the phaseout threshold of $2.03 million.

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Topics: TAX TALK

T&E TALK: Only Certain Trusts May Own S Corporation Stock

Posted by Scott T. Ditman, CPA/PFS on Mar 5, 2018 9:36:16 AM

S corporations must comply with several strict requirements or risk losing their tax-advantaged status. Among other things, they can have no more than 100 shareholders, can have no more than one class of stock, and are permitted to have only certain types of shareholders.

In an estate planning context, it’s critical that any trusts that will receive S corporation stock through operation of your estate plan be eligible shareholders.

Eligible trusts include:

Grantor Trusts. A grantor trust is eligible provided that it has one “deemed owner” who’s a U.S. citizen or resident and meets certain other requirements. Also, when the grantor dies, the trust remains an eligible shareholder for two years, after which it must distribute the stock to an eligible shareholder or qualify as a qualified subchapter S trust (QSST) or an electing small business trust (ESBT).

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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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