Tag: estate-tax
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Estate Planning During Turbulent Times
Low interest rates and market downturns can create opportunities to transfer wealth to the next generation without paying taxes. This can be done through techniques like giving gifts, making loans within the family, or setting up trusts. The IRS sets minimum interest rates for these transactions, which can affect how much wealth can be transferred…
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Family Limited Partnerships: Are They Still Alive and Kicking?
About a year ago, a lawyer wrote an article about family limited partnerships in The Florida Bar Journal. Since then, the IRS has won two cases involving family limited partnerships. The article discusses these recent cases and provides tips on how to avoid making the same mistakes. It also talks about a survey that showed…
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Relationship Dissolution Planning Part II: Planning for Married Couples
When people are getting a divorce, they can plan ahead by creating a property settlement agreement. This agreement says how their property and debts will be divided after the divorce. They can include details about each asset they own and all the money they owe. This can help make the divorce process smoother and less…
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The Testamentary Charitable Lead Annuity Trust Revisited
A testamentary charitable lead annuity trust is a great way for wealthy clients to give to charity and still provide for their family. It pays money to charity for a certain period of time, and then the remaining assets go to the family. The estate gets a tax deduction for the money given to charity.…
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Section 2053 Final Regulations: Continued Uncertainty?
The Treasury Department issued new regulations for deducting expenses and debts when someone dies. The rules say that you can only deduct these expenses if they have been actually paid. If you owe money to someone, you have to pay it before filing the tax return. There are a few exceptions to this rule, like…
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Tax and Asset Protection Benefits Afforded Florida Domiciliaries
The main reason people move to Florida is because of its warm weather. But Florida also has good tax laws and protections for your assets. If you want these benefits, you may need to take some steps to make sure you qualify. If you own property in another state or spend a lot of time…
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Creditor’s Rights Under Private Annuities and Grantor-retained Annuity Trusts in Florida
This article talks about whether annuity contracts are protected from creditors in Florida. The authors argue that even private annuity contracts should be protected under the law, based on their analysis of the statute and previous court decisions. They believe that if the legislature didn’t specifically exclude private annuities from the law, then they should…
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Roth IRA Conversions: Benefits and Planning Opportunities
The main point is that contributing to a Roth IRA allows your money to grow tax-free, unlike a traditional IRA where you have to pay taxes when you take the money out. Converting to a Roth IRA can be a good idea for some people because it means you won’t have to pay taxes on…
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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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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 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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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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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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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…
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New §736.0505(3) Assures Tax/Asset Protection of Inter Vivos QTIP Trusts
Bob and Judy, a married couple, have a lot of money and want to make sure their kids get as much of it as possible when they die. They have $13.5 million, $3.5 million of which is their house and $10 million is in a joint bank account. Their accountant suggests that they put $5…
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State of the Same-sex Union: A Tax Perspective
The U.S. Supreme Court decided that same-sex married couples can now enjoy the same federal benefits as opposite-sex married couples. This means that same-sex couples can claim tax benefits and other rights previously unavailable to them. The decision also stated that same-sex marriages performed in any U.S. or foreign jurisdiction will be recognized for federal…
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Personal Use of Florida Residential Realty by a Nonresident Alien Shareholder of a Foreign Corporate-related Structure
Non-US citizens who don’t live in the US can use a foreign company to buy property in the US. They or their family can live in the house, but there are tax and legal rules they need to follow. The foreign company can directly own the property, or it can own a US company that…
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After Death Does Us Part: Surviving Spouse as Fiduciary and Beneficiary
When spouses name each other as the person in charge of their will and estate, it can create conflicts of interest, especially in blended families. In these situations, it might be better to appoint an outside person, like a bank or trust company, to help. This can be more expensive, but it can help prevent…
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Identifying and Reporting the Proper Taxpayer in International Structures
One of the main issues in U.S. tax law is figuring out who is responsible for paying taxes on certain income. It can be tricky when dealing with non-U.S. entities, as their classification for tax purposes is really important. Sometimes, the person or company getting the income isn’t actually the one responsible for paying taxes…
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Rethinking I.R.C. §2701 in the Era of Large Gift Tax Exemptions
For individuals or couples with a net worth of $5-10 million, there are new opportunities to transfer assets and minimize taxes as the tax exemptions have increased. One way to do this is through a “freeze partnership,” which allows for transferring appreciation of assets to younger generations while keeping control and access to income. This…