Reporting excess deductions when terminating an estate or trust

In May of 2020 the IRS issued long-awaited proposed regulations to give us guidance on how to determine the character, amount and allocation of deductions passed on to a beneficiary of an estate or trust at the time of its termination. These regulations detailed that any excess deduction on termination of an estate or trust …

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Drafting and modifying your will – just leave it to the professionals

As a former probate attorney, I’ve seen some interesting things. One memory that sticks out is receiving a last will and testament with red splotches on it. I told myself it was from candy and that the deceased person must have had a sugar addiction like me. Nonetheless, I quickly scanned the original to my …

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A state estate tax – the other death tax you need to know about

Congress did everyone a favor last year and raised the estate tax exemption to the lofty heights of $11,180,000 per person. As a result, very, very few people will owe an estate tax on death under the current law. So, while a couple can die with as much as $22,360,000 and not owe any federal …

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Social Security: What to do when a family member dies

If you are a spouse, child or parent of someone who has died, you may qualify for Social Security benefits. To get spousal benefits, the deceased family member must have worked long enough under Social Security to qualify. A worker can earn up to four credits each year. In 2018, when a worker earns $5,280, …

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Designating a beneficiary – it can be a mine field

You met with your attorney recently to prepare your will, trust document and durable powers of attorney so you are confident your estate plan is in order. But life insurance, employer-provided retirement plans, individual retirement accounts and annuities are designed to pass at death not by your traditional estate-planning documents, but by a beneficiary designation. …

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Estate, gift and generation-skipping transfer tax changes

Here’s a look at how the Tax Cuts and Jobs Act of 2017 is going to impact the estate, gift and generation-skipping transfer taxes. Estate and gift tax The Tax Cuts and Jobs Act (TCJA) increased the estate and gift tax exemption amount (the “unified credit”) for 2018 to $11,200,000 per person. A married couple …

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Preventing and reporting elder financial abuse

Elder financial abuse is a growing problem. In an earlier blog, I provided information about the reasons elder financial abuse has increased and “red flags” that may indicate abuse has occurred. In this blog, I provide information about preventing elder financial abuse and reporting it if it has already occurred. Ideally, financial elder abuse would …

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Taxpayer Victory in Personal Goodwill Case

In August of 2014, the U.S. Tax Court (the Court) made a decision in a case that addresses personal goodwill, the Estate of Adell v. Commissioner, T.C. Memo 2014-155. In this case, the decedent, Franklin Z. Adell, and his son Kevin formed The Word Network (The Word), a 24-hour television station that broadcasts urban religious …

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Can You Apply a Discount to a Promissory Note?

Hoffman v. Commissioner: Tax Court Accepts 12.5% Discount Rate Treasury Regulation 20.2031-4 states that the fair market value of promissory notes, secured or unsecured, is presumed to be the amount of unpaid principal, plus accrued interest at the date of valuation, unless the taxpayer provides sufficient evidence to the Internal Revenue Service which supports a …

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