Tag: law-firm
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A Primer on Private Placement Life Insurance
PPLI is a type of life insurance that can help with income tax and estate planning. It’s like regular life insurance, but with more investment options and lower costs. It’s a good option for people who want to save on taxes and have more investment flexibility. However, there are certain rules and requirements that need…
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Tax Planning for Cross-border Endorsement Payments to Professional U.S. Athletes
High-profile athletes like professional golfers and tennis players often make a lot of money from endorsing products. Recently, two golfers, Sergio Garcia and Retief Goosen, had legal issues about how their endorsement income should be taxed. The court decided that Garcia’s income was mostly from royalties, which are taxed differently, and that Goosen’s income was…
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The Benefits of Tax Planning as Part of the Acquisition of an International Business
When a business is bought by someone else, it can be a good opportunity to make changes to how the company is taxed. This can help the new owner pay less in taxes. Tax planning is important for every business, and it’s different for each business and its owner. The main goal is to pay…
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Repatriation of Profits to Latin America: Who Needs Treaties!
If you’re not a U.S. taxpayer and you don’t do business in the U.S., you’ll only be taxed on certain types of income from the U.S., like dividends. Unless there’s a tax treaty to lower the tax rate, you’ll usually have to pay a 30 percent tax on U.S. dividends. Most Latin American countries don’t…
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The IRS and Their Pesky Summonses: A Primer on Enforcement and Common Defenses
The IRS uses summonses to get information from taxpayers and third parties for things like auditing tax returns and collecting taxes. Summonses don’t establish guilt or innocence, they just gather information. The IRS is allowed to issue summonses to taxpayers, witnesses, and third-party recordkeepers. For criminal investigations, the IRS can also issue summonses. Once a…
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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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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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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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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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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.…
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An Introduction to the Complexities of Taxing Cross-Border Transfers of Digital Goods and Services
Many companies now sell digital products and services online, like clothes and movies. People use their smartphones to shop and store their data in the cloud. But this has made it hard for governments to figure out how to tax these transactions across different countries. The U.S. has its own tax issues to deal with…
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Using Income Tax Treaties to Convert Taxable Income Into Nontaxable Distributions
The United States taxes its citizens on their income, no matter where they live in the world. Top-earning taxpayers are taxed at a rate of 39.6 percent. However, there are some exceptions to this rule, such as the I.R.C. §911 earned-income exclusion and the exclusion available under I.R.C. §933 for certain âbona-fide residents of Puerto…
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The Applicability of the Administrative Procedure Act to Federal Tax Litigation
When Congress made the Administrative Procedure Act (APA) in 1946, it was meant to balance the power of government agencies with individual rights. The APA allows people to challenge agency actions in court. However, it doesn’t apply if there’s already a way to challenge the action. The U.S. Tax Court, for example, doesn’t follow the…
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Demystifying the Qualified Payment Right: Structuring and Administering a §2701-Compliant Entity
Estate planners use special business entities to help families pass on their wealth without paying high taxes. They often create these entities with two types of ownership: one that gets a guaranteed return on their investment (preferred interests) and one that gets any extra profits (common interests). Older family members can give the common interests…
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Expatriation from the United States: The Inheritance Tax Under I.R.C. §2801
The Heart Act added a new tax called the Inheritance Tax, which applies to gifts or inheritances received from someone who has given up their U.S. citizenship. This tax is paid by the person who receives the gift or inheritance, not the person who gave it up. The tax rate is 40% of the value…
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Corporate Transparency Act to Have Major Impact on Clients and Attorneys
Congress passed the National Defense Authorization Act of 2021, which includes the Corporate Transparency Act. This Act creates a new reporting requirement and database for ownership of U.S. companies, which could affect clients and lawyers when the new regulations take effect. The Act also includes the Anti-Money Laundering Act of 2020, which aims to strengthen…
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Changes in the U.S. International Tax System Proposed by the Biden Administration
Before the Tax Cuts and Jobs Act, the US had a tax system that theoretically imposed US tax on all foreign income of a US-based multinational company. However, there were ways for companies to reduce or avoid paying these taxes, such as forming subsidiaries in lower-tax foreign countries. These subsidiaries could shield profits from US…
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The Trust Beneficiary’s Right of Access to Information
Beneficiaries have the right to know certain information about a trust, but sometimes trustees refuse to provide it. This can lead to beneficiaries feeling upset and hiring lawyers. In some cases, the trustee may not know their responsibilities or may intentionally withhold information. This article explains what information beneficiaries can get under Florida law and…
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Expatriation from the United States: The Exit Tax
If you give up your U.S. citizenship or green card, you may have to pay a special tax. This tax has two parts: an “exit tax” and an “inheritance tax.” U.S. citizens can give up their citizenship at a U.S. embassy, while long-term residents can give up their green card. The tax rules are in…
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Estate Planning During an Election Year: Will It Be 2012 All Over Again?
2020 might be a very busy year for estate planning attorneys because the current laws that give people a big tax break on what they can leave to their family and friends when they die could change soon. The laws are set to expire in 2025, but some people think they might change even sooner,…
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Redefining Retirement in the 21st Century for the Small Employer and America
People are living longer, so we need to save more for retirement. The trend has been to save less, which could cause problems for social programs like Medicaid. Longevity also affects alimony laws, which may need to change. In the past, people had to rely on their kids for support in old age, but after…
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Supervising Your Lawyers and Staff: Avoiding Serious Ramifications
In a law firm, lawyers have to oversee and take responsibility for the work of their non-lawyer staff. They need to make sure that their staff follows the rules and ethical standards of the legal profession. This includes things like how they talk to clients, how they handle important documents, and how they contact people…
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How to Guarantee Enforcement of a Guaranty Agreement
If someone borrows money and can’t pay it back, a guarantor is someone else who promises to pay it instead. There are different types of promises to pay, called guaranties. A “general” guaranty can be used by anyone it’s given to, while a “special” guaranty is only for a specific person or company. An “absolute”…
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Tax Considerations for Contingent Interest and Convertible Debt in Cross-Border Lending Transactions
When it comes to paying interest on debt and converting debt into shares, there are different tax rules that can apply. These rules can get pretty complicated and may have different meanings, depending on the situation. For example, there are special tax rules for debt that makes payments that depend on certain conditions. There are…