Estate planners and tax practitioners have been utilizing incomplete non-grantor trusts, or “ING” trusts, with increased frequency. ING trusts can be utilized for a number of reasons, including, but not limited to, federal income tax planning,[1] asset protection, planning for qualified small business stock benefits, income shifting through distributions to descendants, and others. While this…
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Most tax law is made up of very detailed statutes, regulations, case law, and other guidance. Layered on top of that body of law are a number of “judicial doctrines” that seek to serve as a backstop to formalistic analyses that could result in unintended tax results, allow taxpayers to place the form of transactions…
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The recent opinion from the United States District Court, Eastern District of Tennessee, continues the saga of the case of CIC Services, LLC (“CIC”) and has implications for taxpayers seeking to recover attorneys’ fees under the Equal Access to Justice Act (“EAJA”) and for its broader reflections on governmental fairness, particularly those looking to challenge…
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In a recent Chief Counsel Advice Memorandum[1] (“CCM”), the office of the IRS Chief Counsel debunks the income taxation, or lack thereof, found in promotional materials promoting a structure known as a “Non-grantor, irrevocable, complex, discretionary, spendthrift trust”, with a note that the structure may be referred to by several other similar but slightly different…
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How is relief of debt treated for tax purposes? Does it matter if the debt is recourse or non-recourse? Does it matter if the debtor is a separate entity guaranteed by the owner(s)? Does it matter if the debt is forgiven as part of a sale of property securing the debt? These issues were addressed…
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The Tax Court recently issued an order declining to grant either the IRS’s or taxpayers’ motions for partial summary judgement.[1] The taxpayers in question are the shareholders of a subchapter S corporation that in prior, now closed years, deducted losses from the corporation in excess of their adjusted bases in the corporation’s stock. The IRS…
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It is estimated that approximately 52% of all Americans have some form of life insurance. On the other hand, there are also estimates that only 27% percent of Americans have some form of an estate plan in place. This article provides a brief and simple overview of how the two are not mutually exclusive, and…
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Generally, expenses related to activities that are not engaged in for profit are not deductible.[2] In a recent memorandum opinion[3], the United States Tax Court reiterated the criteria upon which the Court considers if an activity is engaged in for profit. While the recent decision was not a landmark case[4], it provides some cautionary guidance…
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We have covered timing and delivery issues in several articles, such as the recent Demuth and Hoensheid cases.[1] Similarly, the recent Tax Court case of Gage v. Comm’r dealt with the taxpayers that believed they paid a $875,000 settlement to the Department of Housing and Urban Development (“HUD”) in December of 2012.[2] Unfortunately for the…
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A recent Chief Counsel Advice Memorandum (“CCA”) discusses certain tax consequences pertaining to a taxpayer owning cryptocurrency native to a blockchain that undergoes a protocol upgrade. CCA 202316008. In the hypothetical scenario discussed in the CCA, a hypothetical blockchain, very similar to Ethereum, underwent a change in the method in which it approved and processed…
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