At the American Bar Association Tax Section meeting in May, Cathy Hughes of Treasury/IRS announced that Treasury and the IRS are on the verge of issuing regulations under Section 2704(b) that will restrict substantially the ability of holders of family limited partnership interests to get the discounts in valuation those interests have so long held…
Category: Tax
Is the Wrong Form Effective with the IRS?
On occasion, the IRS issues what are called “field service advice.” These are legal opinions designed to assist IRS employees in dealing with taxpayers. The opinions are not legally binding on taxpayers, but knowing what they say can be helpful. In a field service advice dated March 31, 2015, the question was raised when one…
Loss of IRA’s Exemption
One question which comes up a lot is the extent to which assets inside an IRA can be utilized by the participant in various transactions. The problem is the so-called “prohibited transaction rules” in Section 4975 of the Internal Revenue Code.The United States Bankruptcy Court for the Eastern District of Arkansas issued its opinion on…
ABA RPTE Spring Symposium – Hot Topics Breakfast
This edition is the first of a “few” which will be devoted to information gleaned from the American Bar Association’s Real Property, Trusts and Estates’ Spring Symposium in Washington, DC and will be my summary of a few selected sessions. Hopefully this will be of some interest to all of you. Hot Topics Breakfast Richard…
Income Tax Item – Charitable Deduction Fails
Sadly, Kenneth and Susan Kunkel were turned down by the United States Tax Course on April 8, 2015 in their case against the Commissioner of Internal Revenue. The bulk of their dispute revolved around non-cash donations. For all donations of $250 or more, taxpayers generally must obtain a contemporaneous written acknowledgment from the donee. Additional…
Estate Loses Entire Charitable Income Tax Deduction
On February 19, 2005, the United States Tax Court decided the case of Eileen S. Belmont v. Commissioner. Eileen Belmont’s Will gave the residue of her estate to the Columbus Jewish Foundation. The executor elected to deduct that on the Estate’s income tax return, claiming that $219,580 would go to the Foundation. But litigation ensued…
Taxpayer Unable to Recover Legal Fees from IRS
On February 2, 2015, the United States Tax Court issued an opinion in the case of Estate of Roderigo F. Fenta v. Commissioner. Mr. Fenta, the taxpayer, on the Lakeside Lounge for over 30 years until he sold it in November 2010. He was audited and the IRS proposed a deficiency of $13,180 and an…
Rare Case Where Non-Owner Gets to Deduct Home Interest Payments
In most cases, where someone who is not an owner of property pays mortgage payments and property taxes, neither the IRS nor the courts allow that person to take a deduction for the interest paid on the mortgage or the taxes. However, the Tax Court made a rare exception in the case of Qui Van…
2015 Gift and Estate Tax Exemptions, and Other Rates
It’s official. On October 30, 2014, the IRS issued Rev.Proc. 2014-61. That document set all of the tax rates for all of the different schedules, such as “Married Individuals Filing Joint Returns and Surviving Spouses.” The ones we tend to focus on are gift, estate and generation-skipping taxes and taxes on trusts. The annual gift…
529 Plans – Taxation Off the Table
President Obama, as part of a broader tax plan outlined just days before the State of the Union address, included plans to repeal or redirect tax incentives for 529 plans and Coverdell education plans. But there was a significant backlash from both Democrats and Republicans. As a result, the President has decided to leave the…