The rates went down for March. The 7520 rate, used extensively in estate planning, dropped from 2.0% to 1.8%, down from 2.2% the month before. The mid-term AFR is down to 1.47%, a drop from 1.70% last month.
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…
Incompetent Attorney Not Enough to Avoid Penalties
In the case of Specht v. United States, executors of a decedent’s estate sued to get a refund of late-filing penalties. The US District Court found that malpractice by the estate’ attorney, who was later declared incompetent, did not provide reasonable cause for the late filing of the federal estate tax return. Basically, the Court…
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…
Beneficiary Can File Later Will After Accepting Earlier Will’s Benefits
Billye died on October 16, 2011. Her 1985 will was admitted to probate, which divided her estate equally between Beverly and Barry. Her home was conveyed to Barry under that will. Later, Barry filed an October 2010 will (which gave almost all of the estate to him) for probate and sought to have the 1985…
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…
February Applicable Federal Rates
The rates stayed low for this month. The 7520 rate used extensively in estate planning is at 2.0%, down from 2.2% last month. The mid-term AFR is down to 1.70%.
Powers of Attorney
A Blow to Powers of Attorney The Texas Supreme Court denied a motion for rehearing in the case of The Finance Commission of Texas, et al vs. Norwood, et al. The Finance Commission and the Credit Union Commission of Texas had rules and regulations allowing home equity loans to be closed using a power of…
Probate Court Sticks Estate with Legal Fees
In a case arising out of Dallas County, an executor sued to regain possession of property held by another person, spending $27,000 before being successful. Sadly, the executor was denied a request that the court impose those attorneys’ fees on the person who wrongfully withheld the assets from the estate. The court said that there…
Capitalized Interest Not Deductible
A couple got behind on their mortgage. They refinanced in 2010, borrowing an additional $45,000 to pay the past due on their mortgage. The mortgage company issued a 1098 for that year saying it had received less than $10,000 in interest, but the couple claimed that they had paid $48,000 in mortgage interest. The IRS…