Investment Opportunities Involving Private Foundations And Pension Plans

Download Printable Article By Bruce Givner, Esq. Introduction. Private foundations (a particular type of which are charitable remainder trusts) and pension plans are attractive structures since they both involve (i) tax deductible contributions and (ii) no tax on the funds accumulating in them.  Despite their obvious advantages, we find that clients shy away from adopting them due to the tax laws’ restrictions on what they can do with the funds invested in the two structures.  Let’s first discuss the significant advantages of each.  Then we’ll discuss the restrictions and at least hint at the ways to exploit those limits. Private…

Pre-Election Estate Tax Proposals: Clinton vs. Trump

By Martin M. Shenkman, CPA, MBA, PFS, AEP, JD Are major estate tax law changes in the offing? Perhaps, but my Ouija board smoked when I asked the question. So, barring that type of guidance, what assurance can there be? The election hasn’t occurred yet, so there’s certainly no way to know which candidate will win. Party platforms haven’t even been finalized. And, there’s no assurance that the winner’s proposals will be enacted. In spite of the above, practitioners should put all clients involved in active planning on notice of Clinton and Trump’s proposals because they’re so dramatically different. No…

Feeling the Burn: The Importance of the Tax Burn in Estate Tax Planning

Download Printable Article By Steven J. Oshins Esq., AEP (Distinguished) Decades ago, Jane Fonda made the phrase “feel the burn” popular in her highly successful aerobic exercise videotapes.  More recently, “feel the Bern” became popular as the de facto slogan during Bernie Sanders’ presidential bid. But in advanced estate tax planning, we feel a different kind of burn called the “tax burn”.  Very simply, our client transfers assets to an Intentionally Defective Grantor Trust (“IDGT”) and continues to pay all income taxes on income produced by the transferred assets, including capital gains taxes on sales of those assets. By continuing…

Reducing Or Eliminating Capital Gains On The Sale Of Businesses And Real Estate

Download Printable Article By Bruce Givner, Esq. Most people are familiar with the use of a Section 1031 tax-deferred exchange as a way to handle the disposition of real estate.  Some people are familiar with the use of a charitable remainder trust as a way to handle the disposition of unmortgaged real estate and stock in a “C” corporation.  However, Section 1031 exchanges have undesired time constraints; CRTs are disliked because (i) the taxpayer can’t use the sales proceeds and (ii) nothing is left to go to the children (not necessarily true). The best approach is to talk to clients…

Planning for 2704 Proposed Regs: Be Wary of the Step Transaction Doctrine

Download Printable Article By Martin M. Shenkman, CPA, MBA, PFS, AEP, JD The Ultimate Estate Planner recently ran a series of teleconferences on the 2704 Proposed Regs and received numerous responses from our attorney community.  Here’s one we wanted to share with you. Introduction Practitioners are still grappling with the intricacies and complexities of the Proposed 2704 Regulations. But it is vital to start addressing some of the long existing tax doctrines that might undermine planning for the new Regs. Because of the incredible focus on the Regs themselves, little has been written yet on ancillary considerations. Once such potential…

Can a Wrong IRA Beneficiary Designation be Corrected After Death?

Download Printable Article By Michelle L. Ward, JD, LLM, CSEP In recent PLRs 201628004 through 201628006, the IRS considered the effect of a state court action that modified the named beneficiary after the death of the IRA owner. In the rulings, the decedent had originally named three trusts as beneficiaries of his IRAs. The trusts qualified as designated beneficiaries under the IRC Section 401(a)(9) Regulations. When his IRAs were moved to a new custodian, however, the beneficiary was changed to his estate. It was represented that, although the decedent signed the new beneficiary designation form, he merely intended to move…

Surprisingly Common and Dangerous – IRS Foreign Returns

Download Printable Article By Bruce Givner, Esq. Many taxpayers and most all tax professionals have heard about “FBARs” (Foreign Bank Account Reports, on Form TD F 90-22.1).  Some taxpayers and most tax professionals are now also familiar with the Form 8938 Statement of Specified Foreign Financial Assets.  However, virtually every taxpayer and most tax professionals are completely unaware of the top eight other IRS foreign information forms.  In an increasingly interconnected international world, these forms are called for in a surprising number of situations.  In fact, they may be all around you if you are not paying attention.  Given the…

Are Your Clients (And Their Older Relatives) Wasting Their $5.45 Million Coupon To Increase Tax Basis?

Download Printable Article By Edwin P. Morrow III, J.D., LL.M. (Tax), CFP®, RFC® For many taxpayers, the traditional trust design for married couples is now obsolete. The number of estates paying federal estate tax is minimal. Traditional AB trust designs risk incurring higher income taxes after the first death, and reduced basis increase at the second death. New trust designs can not only mitigate against this risk, but create income tax advantages over outright bequests. Practitioners must now consider the applicable exclusion amount not so much as a “coupon” to exempt estate tax, but a “coupon” to increase basis –…

ABA Heckerling Reports from the 2016 Heckerling Institute

For the past 17 years, the American Bar Association Section of Real Property, Trust and Estate Law with the permission of the University of Miami School of Law, releases several extensive reports highlighting the various lectures and proceedings of the Heckerling Institute, one of the nation’s largest estate planning conferences, held every year in January. This past January 2016, marked the 50th Annual Heckerling Institute.  To view, download and access these extensive reports, please click here to visit the ABA’s website. Further, at the above website, you can also access reports from prior Heckerling Institutes as well. We, at The…