Looking for opportunities to reduce tax liability is common. There is nothing wrong with seeking to reduce tax exposure. The late Judge Learned Hand is famous for a commonly quoted opinion from the Second Circuit Court of Appeals, saying: “Anyone may arrange his affairs so that his taxes shall be as low as possible; he…
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Allocating value to personal goodwill can materially affect the tax consequences of a business sale, estate valuation, or gift transfer. But the planning only works when the facts support that the goodwill truly belongs to an individual rather than the business entity. In any business enterprise, goodwill can be a significant and valuable asset. Goodwill…
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We have written before the importance of a property prepared Form 706 Estate (and Generation Skipping Transfer) Tax Return (“706”)[1] as well as the importance of a properly prepared Form 709 Gift Tax Return[2]. In our prior article discussing the 706, we highlighted a Private Letter Ruling (“PLR”) in which the Estate was granted a…
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We have previously discussed the impact of increasing transfer tax exemptions on income tax planning.[1] Those considerations have been solidified after passage of the recent tax legislation known as the One Big Beautiful Bill Act which increased transfer tax exemptions to $15 million, annually adjusting for inflation, without any scheduled sunset date. This can make…
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Use of irrevocable trusts is common in a number of planning scenarios – tax planning, estate planning, business succession, Medicaid qualification, asset protection, etc. Just like there are several reasons irrevocable trusts are created, there can be reasons why a trust may be terminated before the expiration of the term stated in the trust agreement.[1]…
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A recent Tax Court memorandum opinion[1] presents a thorough illustration of the Court’s approach to valuation disputes in syndicated conservation-easement transactions. As is historically typical in these transactions, the case involved a partnership interest sale shortly before the donation and an associated appraisal asserting a dramatic increase in value when compared to the original purchase…
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The Mississippi Supreme Court recently revisited the intersection of family law and probate.[1] The decision offers a reminder that alimony obligations, while enforceable during a recipient’s life, remain subject to statutes of limitation and proper crediting principles that can determine whether an estate owes anything at all. The case at hand offers an interesting twist…
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“Asset protection is a legitimate, legally sanctioned objective; though one that has limitations of its own.” The timing of asset protection planning can be critical when it comes to these “limitations.” By the time a creditor is reasonably foreseeable, the creditor may be able to stop or unwind transfers of assets whether through obtaining an…
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Often, the value of assets can determine tax consequences. This applies in a number of areas including charitable donations, asset allocation on sale transactions, income tax on liquidation of a corporation, gift tax, and estate tax. Because the value of assets determines the amount of tax payable in these and other situations, it is critically…
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Anyone paying attention knows that stock markets have been volatile. As a simple example, the Dow Jones Industrial Average saw an increase of over 600 points (1.56%) on April 11 after dropping over 1,000 points (2.5%) on April 10. Similarly, the S&P 500 gained 9.5% on April 9, but dropped 3.5% on April 10. Generally,…
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