Proposed regulation creates exception to anti-clawback rule

On April 27, 2022, the IRS issued proposed regulations relating to the basic exclusion amount (“BEA”) that applies when calculating federal estate and gift taxes. The new  regulations (anti-clawback rule) would affect the estate of decedents dying after a reduction in the BEA who made certain gifts after 2017 and before a reduction in the …

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What to do if you inherit an IRA

One of the hardest parts about losing a loved one is sorting out their finances during a time of grief. During those tough times, the last thing you want to worry about is making sense of the inherited IRA rules. However, if you are the beneficiary of their account, you’ll want to make decision on …

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65 day rule useful for trustees

Trustees trying to manage the tax burden of a complex trust should be familiar with the 663(b) election, also known as the 65 day rule. Making this election can often help to lower the overall tax burden of the trust and its individual beneficiaries. Don’t miss: Prince estate settles with IRS Trusts pay tax at …

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Prince estate settles with IRS

In an earlier blog, I outlined potential federal and Minnesota estate taxes that may be owed due to Prince’s death in 2016. The IRS and the Prince estate have come to an undisclosed settlement for the federal estate taxes. The trial that was scheduled to start on March 21 has been called off due to …

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Estate closing letter doesn’t mean the IRS can’t take another look

IRS Letter 627 (what we commonly refer to as an estate tax closing letter) is a confirmation the Internal Revenue Service provides to the fiduciary of an estate after they have finished reviewing and have accepted a Form 706 (an estate tax return). These letters are issued on request of the fiduciary no less than …

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2020 tax season comes to an end

During the 2020 tax season, the singular phrase that was overheard reminded me that I had not started a blog yet on the funny things heard towards the end of any filing season – whether it is the spring filing season (the main one) or this mini one here that deals with returns on extensions, …

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Need an estate tax closing letter from the IRS?

An estate tax closing letter is a confirmation that the Internal Revenue Service will provide to the fiduciary of an estate after they have finishing reviewing and have accepted a Form 706. According to the IRS website, a fiduciary should wait at least nine months after the filing of the Form 706 to request the …

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Education tax benefits in Arizona have changed

Getting educated solely from the School of Hard Knocks or the University of Life is something Uncle Sam would like to help us avoid.  To that end we have 529 plans and other education tax benefits. What are they? Simply put, a 529 plan is an investment account that offers tax benefits when used to …

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Can executors be held personally liable?

Executors are sometimes pressured by beneficiaries to “wrap up” the estate quickly and make distributions of estate assets. Often this is because beneficiaries want their money and don’t understand the liability executors can face for distributing the funds before it is advisable. I’ve written before about how this can have significant, adverse consequences when the …

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Can a trust or trustee plead the fifth?

The Fifth Amendment of the Constitution allows a person to refuse to answer questions or give testimony that would go against his or her interest in a criminal proceeding. It also allows someone to refuse to produce incriminating documents. However, this protection does not extend to document requests directed at a person acting in a …

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