It’s a common question from clients. “I live in _____ so why do you want me to set up a trust in Alaska?” Financial planners, estate attorneys, wealth managers, CPAs and insurance folks alike have long favored states like Alaska, Delaware, Nevada and South Dakota for trust situs due to their trust-friendly laws enforced by [...]
As the end of the year approaches many people start thinking about Required Minimum Distributions (“RMDs”). While typically a straightforward process (aggregated prior year-end values divided by the appropriate factor from the IRS table) there are some stumbling blocks that often give people fits. AGGREGATED DISTRIBUTION: Distribution from one non-inherited traditional IRA may be used [...]
Surely this comes as a shock given how well government programs are administered (insert eye roll here!) but this report by the Treasury Inspector General for Tax Administration spells out among other things that taxpayers received $572 million of excess tax credits as part of the Affordable Care Act.
Many of us are familiar with the provision that interest against acquisition indebtedness (i.e. mortgages) up to $1,000,000 and another $100,000 of home equity is a Schedule A itemized deduction for income tax purposes. Unmarried taxpayers sought to "exploit" said provision by each claiming a mortgage interest deduction (thus doubling the limit) while the IRS [...]
“To them I say don’t believe the hype.” - Chuck D “Yo Chuck they must be on the pipe, right?” - Flavor Flav (Obscure references to Styx and Public Enemy in the same post? Time for a self-congratulatory pat on the back!) We’re not going to accuse the financial services industry of smoking crack but [...]
W. Scott Simon often serves in litigation and arbitrations as an expert witness on fiduciary issues. Similarly he frequently writes about the Uniform Prudent Investor Act. Consider the following from a recent article he authored about the problem with disclosing conflicts of interest: “Disclosures of conflicts made by many financial services providers tell you just [...]
In a practical sense the IRS typically has three years from the date an income tax return is filed in which to commence an audit. Failing to do so triggers the statute of limitations. Congressional action has overruled the U.S. Supreme Court. In some instances the IRS may take up to SIX years. There are [...]
In December 2014 the Achieving Better Life Experience (“ABLE”) provision was signed into law providing a means for saving and paying for disability-related expenses. Recently the IRS issued proposed regulations which may be relied upon until (and if) final regulations are proposed. Highlights include: * States may offer tax-favored accounts or contract with other states [...]
Effective July 9th the IRS amended §401(a)(9) of the Internal Revenue Code. Notice 2015-49 guides that qualified defined benefit plans will generally not be permitted to replace any joint and survivor (“J&S”), single life (“SLA”) or other annuity in current payment status with a lump-sum or other accelerated payment form.
Hey IRS, you want a fight? Bring it on! A recent IRS decision limits individuals to one IRA rollover a year in hopes of avoiding exploitation of a loophole allowing the use of retirement accounts as short-term, tax-free loans The strategy was simple. Withdraw money from an IRA and use it to cover short-term cash [...]