Category: Florida BAR article
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Navigating IRS Challenges to Conservation Easements
The IRS is really cracking down on deductions for conservation easements. There have been a lot of court cases about it since 2010. If you’re thinking about doing a conservation easement or have one already, it’s important to stay up to date with the latest rulings and understand how they fit into the law. This…
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Depreciating Business Aircraft: Avoiding the Entertainment Disallowance and §280F
Business aircraft are often seen as a luxury rather than a useful tool. The IRS closely monitors aircraft purchases and use. However, when used properly, a business aircraft can be a valuable asset for a business. The biggest fixed cost for a business aircraft is depreciation. To qualify for depreciation, an aircraft must be used…
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Florida Corporate Income Tax: Reporting of Federal Audit Adjustments
The Florida Corporate Income Tax (FCIT) uses the Internal Revenue Code to figure out how much tax a company owes. If the IRS looks at a company’s taxes and makes changes, the company has to file an amended FCIT return in Florida. There are time limits for when the Florida Department of Revenue can assess…
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A Practical Guide to Trustee Selection: A Review of the Most Common Tax (and Nontax) Traps
When it comes to estate planning, trusts are important. Choosing the right trustee can be challenging and have consequences for taxes. There are three perspectives to consider: the person setting up the trust, the person who will benefit from it, and the trustee. This article focuses on six important things to consider when choosing a…
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Pre-Immigration Tax and Estate Planning: Pitfalls and Considerations Related to Domicile
When it comes to taxes and where someone lives for tax purposes, it’s not just about where they physically live, but also about their intention to stay there. This is determined by looking at things like where their family is, where they work, and where they live. There are also specific rules for different types…
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State Income Tax Planning for the Nonresident Floridian: The ING Trust
Florida is a great place to live because there’s no state income tax. Many people move here from other states and keep ties to their old state. Florida lawyers have to know about tax laws in other states to help their clients. Some people use a special kind of trust to avoid paying income tax…
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IRS Thinks Certain Profits Interests Are Too Good To Be True
In 2012, Mitt Romney’s company, Bain Capital, used a tax planning technique called management fee waivers to save on taxes. This technique allowed them to convert management fees into long-term capital gains, resulting in significant tax savings. The IRS has since proposed regulations to treat the grant of certain profits interests as disguised payments for…
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When Charitable Gift Agreements Go Bad: Why a Morals Clause Should be Contained in Every Charitable Gift Agreement
After becoming CEO of Tyco International, Dennis Kozlowski made the company very successful. However, he was later convicted of serious crimes and sent to prison. Before his conviction, he donated a lot of money to Seton Hall University, Berwick Academy, and Cambridge University. When he was convicted, the schools didn’t want his name on their…
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The Crux of the Clutch CRUT Crutch: How to Fix an Impermissible Split-Interest Trust to Obtain an Estate Tax Charitable Deduction
Creating a charitable remainder trust (CRT) at death is a way to get a tax break in someone’s estate after they have passed away. There are specific rules that the trust must follow in order to qualify for this tax break. If the rules are not followed, the trust can be “broken” and the tax…
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Proposed U.S. Model Treaty Provisions May Dramatically Alter International Tax Landscape
The U.S. Model Income Tax Treaty is like a template for making deals with other countries about taxes. The Treasury Department has proposed some changes to the treaty, which could affect how foreign businesses are taxed in the U.S. The current rules say that foreign businesses only have to pay taxes on certain types of…
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Estate Planning with Carried Interests: Navigating I.R.C. §2701
Private equity firms and hedge funds are moving to Florida to take advantage of tax savings. Fund managers control and invest in these funds to make profits. They get a share of the profits (called a “carried interest”) in exchange for their services. Other investors, like pension plans and wealthy individuals, also invest in these…
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Continuing Trends in State Tax Litigation: Nexus and Challenging State Tax Laws in Federal Courts
Sales and use tax nexus continues to be a big issue in state tax cases. There are three important U.S. Supreme Court cases that have shaped the law in this area. One of the cases, called National Bellas Hess, Inc. v. Dept. of Revenue of Ill., involved a mail order seller who only shipped goods…
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Florida Family Trust Companies: Tax and Nontax Considerations
If a family-run investment company wants to avoid SEC regulation, it can qualify for exemptions. One way is if it only serves family members and is owned and controlled by family members. Another way is if it follows state regulations instead of SEC rules. Using a family-run investment company for family trusts can cause tax…
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The International Athlete and Entertainer: A Summary of Important U.S. Tax Considerations
Many famous athletes and entertainers from outside the U.S., like Justin Bieber, Manu Ginobili, Roger Federer, and Shakira, earn a lot of money in the U.S. They face special tax issues because of their income and travel. It’s important for them to plan for taxes from the start of their careers, as it can save…
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Owners for Tax Purposes Only: The Equitable Ownership Doctrine and Ad Valorem Taxation of Long-Term Leasehold Interests
The equitable ownership doctrine can make tenants responsible for property taxes. In Florida, two court cases showed that tenants can be considered owners for tax purposes, even if the government owns the property. This means that the government can make money from leasing out property and also from property taxes. This can cause problems for…
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Estate Planning in 2015 and Beyond: No Longer a One-Size-Fits-All Approach
In the past, estate planning for lawyers was focused mainly on reducing estate taxes, without considering other important factors like income taxes, asset protection, and charitable planning. However, recent changes in laws and the economy have made estate planning much more complex. Before 2000, estate and gift tax exemption was only $675,000 and the top…
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Plan Ahead: Protect Your #DigitalFootprint
As the world goes paperless, digital assets like photos, videos, social media accounts, and even virtual property are becoming really important. But, not many people are planning for what will happen to their digital stuff after they die. The laws about this stuff are always changing, and different websites have different rules. So, it’s important…
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Moving from New York to Florida: Perfecting Domicile
People in New York are thinking about moving to Florida for tax reasons. But just buying a house there isn’t enough to avoid New York taxes. They have to prove they’re really living in Florida now. This article explains what that means and what they have to do to make it official. Domicile is where…
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It’s in Your Interest: New §163(j)s Limitations on Business Interest Deductions
The Tax Cut and Jobs Act of 2017 changed how businesses can deduct their interest expenses. This has a big impact on how businesses use debt in their finances. In the past, businesses could deduct the interest they paid on their debt from their taxes, which made using debt a popular choice for financing. But…
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Reasonable Answer Done the Wrong Way: Supreme Court Overturns Quill in South Dakota v. Wayfair, Inc.
Summary: A legal firm is representing a person in a court case. The person is accused of stealing trade secrets from their former employer. The legal firm is trying to defend them in court. The U.S. Supreme Court ruled that states can now force online retailers to collect and remit sales tax, even if they…
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International Tax and Estate Planning: Use of Check-the-Box Election in the Foreign Corporate-Trust Context
The check-the-box election is really important for international tax and estate planning. One common strategy is to use a foreign corporation owned by a trust to avoid U.S. estate tax on the death of the grantor. But with recent tax law changes, this strategy needs to be adjusted to avoid other tax issues. One way…
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Get Your 20 Percent Deduction by Calling 1-800-888-199A
The Tax Cuts and Jobs Act was passed in 2017 and will affect how lawyers and law firms in Florida plan their income taxes in 2018. The new laws will provide tax benefits for many lawyers, but they may need to restructure their finances to take full advantage of these benefits. The article explains important…
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The Tax Cuts and Jobs Act: Still Waiting for That Postcard
President Donald Trump signed the Tax Cuts and Jobs Act into law in December 2017. It made changes to the tax system, with the goal of making it simpler. Some parts of the tax code are easier, but others, especially for businesses, are more complicated. Many of the changes will expire in 2026. So, filing…
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Bursting Bubbles: Evidentiary Presumptions in Personal Liability Assessments
If a business owner in Florida receives a Notice of Assessment: Personal Liability from the Florida Department of Revenue, it means the department believes they are personally responsible for the company’s tax debt. The penalty can be twice the amount of the tax owed, and the department is assumed to be correct unless proven otherwise.…