Apr 25, 2017

National Health Care Decisions Day: Do You Know Where Your Advance Directive Is?

Estate Planning

National Health Care Decisions Day was recognized this year the week of April 16-22. The purpose of the week was to focus on weaving Advance Directives and end-of-life care planning “into the fabric of life1.” Although the week has passed, it is critical to understand the importance of Advance Directives. What is an Advance Directive?  Often called a living will, it details a patient’s wishes for treatment when the patient is seriously ill and unable to make or communicate his or her own medical decisions.  Often, in the same or a separate document, it will name a health care agent or… Read more


Sep 7, 2016

Call to Action: Proposed Regulations May Limit Valuation Discounts

The Internal Revenue Service published proposed regulations on August 4, 2016, that will severely limit valuation discounts on the transfer of ownership interests to family members in family-controlled entities, such as corporations, partnerships, and limited liability companies. The proposed regulations will apply to all family-controlled entities, even those that own operating businesses. Generally, when a minority interest in a family-controlled entity is being transferred the value of the interest is reduced for transfer tax purposes since the interest being transferred lacks control over the entity, as well as because the interest is not freely marketable outside of the family. These… Read more


Nov 23, 2015

2016 Estate Planning Update

As soon as the last of the turkey is made into turkey soup, ‘tis the season to focus on year-end tax planning, particularly taking advantage of the gift tax annual exclusion. An individual can make gifts free of gift tax and without using any of his or her lifetime gift tax exemption of up to $14,000 per person per year.  A married couple can make gifts of up to $28,000 per person per year regardless of which spouse actually makes the gift.  (The annual exclusion amount is adjusted annually for inflation but will remain at $14,000 for 2016.)  However, if… Read more


Sep 14, 2015

Lost and Found: Musings on the Tax Consequences of a Found Violin

Recently it was reported that Roman Totenberg’s Stradivarius was found 35 years after its suspected theft.  The Stradivarius disappeared in 1980, believed by most to have been stolen.  The violin surfaced this past June when an appraiser identified the Stradivarius as the missing violin. Eventually, Roman Totenberg’s daughters recovered the violin as his heirs.  Mr. Totenberg died in 2012. Generally, it is not a taxable event when a property owner recovers stolen property. However, taxable income will be realized if the taxpayer took an income tax deduction for the theft loss.  In such case, the value of the recovered property… Read more


Aug 31, 2015

Anticipated 2704 Valuation Discount Regulations

Authored by: Dana L. Mark In 1990 Chapter 14 (Special Valuation Rules) was added to the Internal Revenue Code to prevent the manipulation of the transfer tax value of a proprietary interest in certain entities in the context of transfers between related parties. In other words, what discounts ought to be taken into account in valuing the transferred interest if control of the entity remains within the family. Included among the new rules was Section 2704 dealing with the treatment of certain lapsing rights and restrictions. Essentially, in the context of a family held entity, if the interest in the… Read more


Dec 16, 2013

EYES ON NEW YORK STATE (Estate Tax Update)

Authored by: Roy P. Kozupsky, Esq. Every once in a while (admittedly not often in this author’s opinion) do our elected officials get tax policy right.  There just seems to be too many special interest groups clogging up the essential arteries of our nation’s government. However, in October of this year, Governor Andrew M. Cuomo announced the formation of the Tax Relief Commission.  Its aim: “devising a series of targeted tax relief proposals” to lower the tax burden(s) of living and doing business in New York State.  Quite admirable in scope, but obviously not an entirely unique aspiration.  Skeptics among… Read more


Jul 2, 2013

The Overturning of DOMA has Broad Tax Implications

Authored by: Paul J. Sowell, Esq. In a 5-4 decision issued this past Wednesday, the U.S. Supreme Court ruled that the Defense of Marriage Act (DOMA) is unconstitutional, paving the way for the federal recognition of same-sex marriages. Justice Anthony Kennedy, writing for the majority, said that the act wrote inequality into federal law and violated the Fifth Amendment’s protection of equal liberty: “DOMA singles out a class of persons deemed by a State entitled to recognition and protection to enhance their own liberty. It imposes a disability on the class by refusing to acknowledge a status the State finds… Read more


May 13, 2013

“There is nothing permanent except change.” -Heraclitus

Authored by: Paul J. Sowell Just when those impacted by the moving target that was the gift and estate tax exemption collectively sighed in relief at the passage of the fiscal cliff deal, it appears the celebration may have been premature.  President Obama recently released his proposed budget for 2014 where he seeks to revisit the exemption amounts. Under the President’s proposed budget, the gift and estate exemption would be reduced to the 2009 level of $3.5 million and the estate tax rate would be set at 45% starting in 2018.  In addition to fiddling with the gift and estate… Read more


Apr 16, 2013

You Are Not Finished With Your 2012 Gifting Until You File Your Gift Tax Return

Authored by: Neeli G. Shah Many opportunistic taxpayers rushed to make year-end gifts during 2012. As a result, a record number of 2012 gift tax returns are expected to be filed in 2013. These returns were due yesterday, April 15, 2013, although the due date can be automatically extended by six months.  The importance of accurately reporting and timely filing a 2012 gift tax return should not be understated, even if no gift tax is expected to be due.  This is especially true if you made gifts to a trust for the benefit of your grandchildren; gift-split with your spouse;… Read more


Jun 21, 2012

Wandry – A Significant Step Forward for Defined Value Clauses

Authored by: Neeli G. Shah On March 26, 2012, the United States Tax Court issued a memorandum opinion in Wandry v. Commissioner, which was an important taxpayer victory in the world of defined value clauses (“DVC”).[ref]This article only focuses on certain aspects of the Wandry case.  Clients and taxpayers must fully review the entire case or consult at tax professional prior to using DVCs for personal estate and gift tax planning purposes.[/ref]  A DVC is a formula clause that allows the taxpayers to determine a gift’s fair market value, for federal gift tax purposes, by referencing a fixed dollar amount… Read more