Berdon Blogs

T&E TALK: Estate Planning Strategies for Non-U.S. Citizens

Posted by Scott T. Ditman, CPA/PFS on Apr 30, 2018 7:01:00 AM

Non-U.S. citizens face some estate planning challenges when it comes to taxes. If you’re a U.S. resident, but not a citizen, the IRS treats you similarly to a U.S. citizen, with a few exceptions. But, if you’re a nonresident alien, the tax treatment of your estate will be significantly different.

Understanding Residency

IRS regulations define a U.S. resident for federal estate tax purposes as someone who had his or her domicile in the United States at the time of death. One acquires a domicile in a place by living there, even briefly, with a present intention of making that place a permanent home.

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Topics: T&E TALK

SALT TALK: Take My Tax … Please (California)

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 23, 2018 11:30:00 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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TAX TALK: Individual Tax Calendar: Important Deadlines for the Remainder of 2018

Posted by Michael Eagan, J.D., LL.M. on Apr 23, 2018 9:30:00 AM

With April 17 behind us, to help you make sure you don’t miss any important 2018 deadlines, here’s a look at when some key tax-related forms, payments, and other actions are due. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you.

Please review the calendar and let us know if you have any questions about the deadlines or would like assistance in meeting them.

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Topics: TAX TALK

T&E TALK: A Total Return Unitrust (TRU) May Help Maintain Family Harmony

Posted by Scott T. Ditman, CPA/PFS on Apr 23, 2018 7:00:00 AM

A traditional trust can sometimes create a conflict between the lifetime and remainder beneficiaries. For example, investment strategies that provide growth that benefits remainder beneficiaries can leave lifetime beneficiaries with little or no annual payouts. This makes it more difficult for your estate plan to achieve your objectives and places your trustee in a difficult position. A total return unitrust (TRU) may offer a solution.

A TRU frees the trustee to employ investment strategies that maximize growth (total return) for the remainder beneficiaries without depriving lifetime beneficiaries of income. Rather than pay out its income to the lifetime beneficiary, a TRU pays out a fixed percentage (typically between 3% and 5%) of the trust’s value, recalculated annually, regardless of the trust’s earnings.

Considerations when Creating a TRU

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Topics: T&E TALK

SALT TALK: The Day We Have Been Waiting For

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 16, 2018 12:29:56 PM

It is April 16th, a day that most accountants hate but gleefully look forward to, nonetheless.  Since April 15th, “Tax D-Day” fell on a Sunday, midnight tonight is when it all comes to a screeching halt.  But if you are a state and local tax geek, this is certainly the week we have been waiting for our entire careers.

The Supreme Court of the United States is going to hear the potentially landmark case of South Dakota v. Wayfair, which may in fact overturn the physical presence standard established by the Court over 25 years ago in Quill.  With that introduction and my full attention required to assist with last minute tax filings (mainly, my own) and the need (as well as the desire) to monitor every possible development regarding Wayfair, I leave you with a very relevant blog “rerun” that sums up the problem. 

Readers should note, Amazon now collects sales tax in every state that imposes one.

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TAX TALK: How Long Should You Retain your Tax Records?

Posted by Michael Eagan, J.D., LL.M. on Apr 16, 2018 9:17:00 AM

You should keep your tax records for at least three years from the date you file your tax return. The Internal Revenue Service (IRS) generally has three years to assess additional tax liabilities and you generally have three years to amend a prior tax return. However, since under some circumstances the IRS has up to six years to audit your returns, you should consider keeping your records for six years from the date you filed your tax return.

What to Keep Longer

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Topics: TAX TALK

T&E TALK: Missed the 60-day IRA Rollover Deadline? Apply for a Waiver

Posted by Scott T. Ditman, CPA/PFS on Apr 16, 2018 7:01:00 AM

IRAs and employer-sponsored plans such as 401(k)s are powerful retirement savings tools, but they also provide valuable estate planning benefits. If you hold a traditional IRA for life, for example, your children or other heirs can stretch out distributions over their lifetimes, maximizing the IRA’s tax-deferred growth and preserving more wealth for the family. If, however, you receive a distribution from an employer plan (such as when you change jobs or retire) and you don’t roll over the funds into an IRA or new plan within 60 days, you can lose these benefits.

What are the Tax Consequences?

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Topics: T&E TALK

SALT TALK: Permanent Place of Abode: Vacation Planning Tips 

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 9, 2018 11:22:16 AM

Summertime is almost here and with vacation plans at the forefront of our minds, it seems like the perfect time to recap what I’ve gone over with my faithful readers regarding one important aspect of the statutory residency test, the permanent place of abode (PPA).

Remember, assuming one is domiciled somewhere other than New York (New York State and/or New York City), if you don’t have a PPA, you can be in New York every day and not be a tax resident.  The simplest example being a New Jersey domiciliary commuting to work in New York is certainly going to be present for more than 183 days (at least if he or she is an accountant) but they won’t be a tax resident if they don’t have a PPA.

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TAX TALK: There’s Still Time to Make 2017 IRA Contributions

Posted by Michael Eagan, J.D., LL.M. on Apr 9, 2018 9:17:00 AM

Tax-advantaged retirement plans like IRAs allow your money to grow tax-deferred — or, in the case of Roth accounts, tax-free. The deadline for 2017 contributions is April 17, 2018. Deductible contributions will lower your 2017 tax bill, but even nondeductible contributions can be beneficial.

Don’t Lose the Opportunity

The 2017 limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on December 31, 2017). However, any unused limit can’t be carried forward to make larger contributions in future years.

This means that, once the contribution deadline has passed, the tax-advantaged savings opportunity is lost forever. So to maximize your potential for tax-deferred or tax-free savings, it’s a good idea to use up as much of your annual limit as possible.

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T&E TALK: Securities Laws Can Impact Your Estate Planning

Posted by Scott T. Ditman, CPA/PFS on Apr 9, 2018 7:00:00 AM

For a variety of estate planning and asset management purposes, many high net worth families hold their assets in trusts, family investment vehicles, or charitable foundations. If assets held in this manner include interests in hedge funds, private equity funds, or other “unregistered” securities, it is important to ensure that the entity is qualified to hold such investments.

Certain exemptions under the federal securities law require that investors in private funds and other unregistered securities qualify as “accredited investors” or “qualified purchasers.”

What is an Accredited Investor?

Accredited investors include financial institutions and other entities that meet certain requirements, as well as certain officers, directors, and other insiders of the entity offering the securities. They also include individuals with either:

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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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