Category: Florida BAR article
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So You Left Your Trust at Home When You Moved to Florida
Florida is a popular place for retirees because of the warm weather and tax benefits. Many people who move to Florida from other states may have irrevocable trusts that need to be reviewed. These trusts may have outdated rules and may need to be changed. This article talks about how it may be possible to…
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Considerations When Combining Crummey Powers with Total Discretionary Trusts
Total discretionary inter vivos trusts have many benefits, like taking care of multiple generations’ needs and protecting those who can’t handle money or have addictions. Adding Crummey powers to these trusts can have consequences for gift tax, but it can still save taxes for other beneficiaries. It might be helpful when the settlor is worried…
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Things That May Surprise You About Florida’s Principal and Income Act and Related Accounting Law, Part I
Mom’s will gives Son a piece of rental real estate and gives the rest of the estate to Daughter. The will doesn’t say who gets the money from the rental property or who pays for its expenses. After Mom dies, the estate gets $12,000 in rent and pays $2,000 in property taxes. It also has…
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Employer-owned Life Insurance After the Pension Protection Act of 2006
Employers often buy life insurance for their employees, but there have been some cases of abuse. Congress added a new law, 101(j), to stop these abuses. This law has extra requirements for employers, and if they’re not followed, the money from the life insurance could be taxed. In the 1980s and 1990s, some companies started…
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Miami Beach: Receded, Revised, and Reaffirmed
The Supreme Court of Florida released three important opinions in 2008, upholding the principles established in a landmark 1980 case. These decisions are crucial for local governments in Florida to access funding for important projects like schools and fire stations. The court ruled that local governments can issue tax-increment financing bonds without a referendum, as…
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Should I Stay or Should I Go? Tax Considerations in U.S. Expatriation
When U.S. citizens decide to give up their citizenship (expatriate), they may still have to pay taxes even after they leave. This is especially true for certain “covered expatriates.” These tax rules can be complex and may cause problems for people who want to leave the country. It’s important for people thinking about expatriating to…
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Estate Planning for Same-sex Partners
Back in the days of old TV shows like Leave it to Beaver, The Donna Reed Show, and Father Knows Best, people only saw romantic relationships between a man and a woman. But now, things have changed a lot and many people accept and support gay and lesbian couples. However, the laws about leaving property…
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The Tax Benefits and Obstacles to U.S. Businesses in Transferring Foreign Intellectual Property to Foreign Affiliates
Multinational businesses often use different types of entities to operate and may move money and assets between them. This can be looked at closely by the IRS for tax purposes. Transferring intellectual property between different parts of a business can help lower taxes. The U.S. used to make up a bigger part of the world’s…
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Estate Planning with Portability in Mind, Part II
The planner needs to know about a tax rule that could affect estate planning, and it’s better to plan for potential tax benefits in the first place, rather than hoping to fix it later with a different tax rule. This column is from the Tax Section, and it’s about the important principles of duty and…
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Estate Planning with Portability in Mind, Part I
Before 2011, if someone died without using all of their estate and gift tax exemption, it was lost forever. In 2010, a law called the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act was passed, allowing for “portability” – the ability for a surviving spouse to use their deceased spouse’s unused exemption amount. This…
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Estate Planning: The Clock is Ticking Use it or Lose it Before 2013
In 2010, President Obama signed a law that changed the estate, gift, and generation-skipping transfer (GST) tax rates and exemptions. These changes will end in 2012, and if new laws aren’t passed, the old tax rates and exemptions will come back in 2013. This means that people should consider using the new tax laws to…
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The Florida Estate Tax: Updated
The 2010 Tax Act made changes to the Federal estate tax, affecting the Florida estate tax as well. It extended the phase-out of the state death tax credit through December 31, 2012 and imposed the federal estate tax on estates of decedents who died after December 31, 2009. It also provided an election for estates…
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U.S. Tax Planning for the International Transportation of Goods by Containers
TL;dr: A legal case involving a car accident and a lawsuit against the driver and their insurance company. The injured person is seeking compensation for medical bills and lost wages. The case is being handled by a law firm and attorney, and is going to court. U.S. container ports handle a lot of cargo, which…
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The Dirty Dozen: Twelve Documents Every Attorney Should Review Before Serving on the Board of a Tax-exempt Organization
As a board member of a community theater, it’s your job to make sure the organization’s finances are in order. This means paying attention to the financial reports and making sure the finance and audit committees meet regularly. If you don’t do this, you could be held personally responsible if something goes wrong. Lawsuits against…
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Disappearing and Reappearing Value on a Two-way Street: The Reverse Chenoweth Situation
In the Bongard case, the court said that the estate may be able to get a tax deduction for a gift the person who passed away made to their spouse, even though the gift was pulled back into the estate for tax purposes. In the Lauder case, the court allowed a tax deduction for the…
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Pre-immigration Tax and Estate Planning: Utilization of Code Section 121 Exclusion
If a foreign person is moving to the U.S., they should consider the tax benefits of selling their foreign home before they move. They may be able to exclude up to $250,000 (or $500,000 if married) of the profit from the sale of their home from U.S. taxes. This applies even if the home is…
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Rev. Proc. 2010-36: Something Smells Foul (Again!) for Chinese Drywall Victims
Between 2003 and 2007, many homes in the US were built with Chinese drywall, which caused problems like corrosion, bad odors, and health issues for people living in those homes. The IRS issued guidance for homeowners to claim a tax deduction for the damage caused by the defective drywall, but it didn’t help everyone. The…
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Foreign Investment in U.S. Real Property: Navigating Through the Income, Estate, and Gift Tax Traps
Foreign investors are investing in Florida real estate because of the great deals available. However, they need to be aware of the tax implications. The IRS considers foreign investors as nonresident aliens, and they need to be aware of federal income taxation, transfer taxation, and FIRPTA withholding requirements. This is a complex area of law,…
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Roth IRA Recharacterizations: It’s 2011 Now What?
Should I choose a Roth IRA or not? That’s the big question. Should I pay taxes upfront or risk future tax troubles? In 2011, the question might be whether to change my decision on the Roth IRA. Can it be undone? It’s important to understand the rules for recharacterizing a Roth IRA in case it’s…
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Will Malta Become the New Ireland in International Tax Planning?
U.S. taxpayers have historically looked to Ireland for setting up operations in Europe due to its skilled workforce, infrastructure, and tax benefits. However, with the new U.S.-Malta income tax treaty, Malta has become a more attractive option with its low corporate income tax rate and favorable tax treatment of intellectual property. This article will discuss…
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Roth IRA Conversions as an Asset Protection Strategy: Does it Always Work?
Before 2010, you could only switch from a traditional IRA to a Roth IRA if your income was $100,000 or less. But now, anyone can do it, no matter how much they make. With a traditional IRA, you put in money that hasn’t been taxed yet, and it grows without getting taxed. But when you…
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Chinks in the Armor: Current Trends in Limited Liability Company Structure After Olmstead
This article is about different types of businesses and how they protect the owners’ assets from outside creditors. It explains that corporations have been around for a long time and one of their main benefits is that they protect the owners’ assets from claims against the business. It goes on to talk about how sometimes…
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Navigating the Minefield of Settlements: A Primer on Tax Issues for the Probate and Trust Litigator
In tough economic times, there are more disputes over wills and trusts. This is because more people know their rights and the legal documents are more complex. As a result, lawyers who handle these cases are seeing more business. I’ve helped these lawyers with tax issues in these cases. This article is meant to help…
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Five Tax Traps for Resident Noncitizens (and Their Attorneys!)
More and more people from different countries are moving to Florida for better opportunities. But when they become residents in the U.S., they have to be careful about taxes. They might have to pay taxes on their income and assets from their home country, which can be a surprise. They also have to follow specific…