by Matt O’Kane and Jason Palmisano
The laws governing the U.S. estate and gift tax system are complex. For Non-U.S. Citizens, the U.S. estate and gift tax system is more onerous and requires a much higher degree of awareness. We recently hosted a seminar discussing several issues Non-U.S. Citizens face in transferring their asset to their loved ones and providing strategies to minimize U.S. transfer taxes, including:
By: Amanda Wilson
Several years ago, many taxpayers faced with underwater partnerships would abandon their partnership interests, thereby triggering an ordinary loss. This ordinary loss was often preferred over the capital loss that would be triggered if the taxpayer’s sold their partnership interests or liquidated the partnership. Capital losses are less advantageous, as they can generally only be used to offset capital gains. By contrast, ordinary losses can offset ordinary income, providing a much bigger tax benefit.
By: Amanda Wilson
Tax identity theft is a big issue right now, with people only discovering that they are victims when they go to file their tax return with the IRS. Instead of having their returns accepted, these people find themselves having their returns rejected by the IRS becuase an identity thief has already filed a fraudulent return (and received a huge refund check). The next year will be a nightmare of frustration and red tape as they try to resolve the issue with the IRS.
By: Amanda Wilson
An S corporation is a popular tax vehicle for family owned businesses, as it allows for a single layer of tax instead of the double layer of tax imposed on regular corporations. Instead of the S corporation paying tax, the taxable income of the S corporation passes through to the shareholders and is reported on the shareholders’ personal tax returns. The S corporation can generally then distribute the accompanying profits to the shareholders free of federal tax.
By Julia L. Frey. One of the most important decisions one can make when setting up a trust for a child or other loved one is determining who to name as the trustee. It is a job (not a cake-walk) that requires dilegence, an understanding of the fiduciary responsibilities and an understanding of what the grantor’s intent is for distributions under the Trust. Over the years I have seen family members or friends named as trustees who have not understood the depth of their role or were not capable. In one case, a family came to me after a family member stole all of the trust money to feed his drug habit, leaving the beneficiaries without any recourse as he had no means to repay the stolen funds. Corporate trustees or co-trustees are often the answer to avoid such problems. A just read a recent article in Worth Magazine by Patrick Kenefick with Neuberger Berman that was right on point so I commend it to you for your reading. http://worth.com/index.php?option=com_advisors&id=2005&view=single
