Is a Revocable Trust a Trust (and Related Topics)?

The Sixth Circuit Court of Appeals has recently issued an opinion that discusses a number of topics especially important to asset protection and trust attorneys.[1] Some of the issues discussed involve trust law, tax law, asset protection law, and contract law. As recognized in the dissent, the court’s conclusions on a number of these issues…
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Incomplete Non-Grantor Trusts: A Tax Planning Tool

In recent years, estate planners and tax practitioners have been utilizing incomplete non-grantor trusts, or ING trusts, with increased frequency. The most common use of ING trusts has been to minimize state income taxes, but an often-overlooked aspect of ING trusts is their effectiveness as a tax planning tool at the federal level. ING trusts…
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MTC Partnership Update

Last year, I wrote about the Multistate Tax Commission’s (“MTC”) undertaking called the Project on State Taxation of Partnerships (“Project”).[1] Throughout the Project, the MTC has updated the Project website with summaries, notes, markups to draft documents, and other useful information.[2] The most recent Project meeting was held on July 25, 2022.[3] Broadly speaking, the…
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Taxpayer Loses Royalty Tax Case Appeal

In a recent appellate decision from the Ninth Circuit, a taxpayer/attorney/neurosurgeon/corporate shareholder who helped develop a patented imaging technology was held liable for ordinary income assessments with respect to annual royalty payments related to patent royalty income. Facts Dr. Aaron Filler, a licensed attorney and neurosurgeon, contributed to the development of a certain Diffusion Tensor…
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Private Jet Charitable Deduction Fails for Lack of Substantiation

In Izen v. Comm’r, the Fifth Circuit Court of Appeals recently affirmed a Tax Court decision to deny a taxpayer’s charitable contribution deduction where the taxpayer failed to meet the statutory documentation requirements for the charitable contribution.[1] The key documentation that the taxpayer lacked was a contemporaneous written acknowledgement that included his taxpayer identification number.…
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Change your Facts, Same Tax

Generally speaking, tax follows the facts. One can of course change those facts, but when done so merely superficially, intended results may not follow. Some may be more familiar with the phrase “putting lipstick on a pig.” Well, that seems to be more or less the case in the recent opinion released in the Eighth…
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Deductibility of Son-in-Law’s Tuition Expense

In the recent Tax Court Opinion of Sherwin Community Painters, Inc. v. Comm’r, a corporation was denied a Section 162 business deduction for amounts paid for the boyfriend of the sole shareholder’s daughter to take a course in coding.[1] Gray Edmondson discussed the importance of being in a trade or business years ago, one of…
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Advanced SLAT Issues

In a previous article, we discussed the basics of Spousal Lifetime Access Trusts (“SLATs”).[1] Generally, SLATs are irrevocable trusts established by one spouse during such spouse’s lifetime with the other spouse being a beneficiary of the trust. Often both spouses will establish a SLAT, but they must be carefully structured and administered to prevent application…
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