Experience shows that the biggest liquidity problem is not paying estate and inheritance taxes – it is equalizing the inheritance among the family members. Business is very difficult, if not impossible, to divide equitably. Many business owners ignore this problem. They leave behind them a legacy of hard feelings and bitterness. Therefore, for the sake… Read More
Abysmal returns from stocks, bonds and mutual funds have some people turning to alternative investments like gold or real estate. Investments such as art, antiques, precious gems, stamps, coins and other collectibles are not permissible investments for an IRA under any circumstances. What about investing the IRA in real estate? Real estate is not per… Read More
The cost of a pure business trip is 100% deductible. Unreimbursed hotel, airfare, car expenses, cleaning, telephone, tips, are all 100% deductible as well. Up to 50% of the cost of meals are deductible. In general, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job.… Read More
The biggest challenge for estate planners is how to reduce estate and gift taxes but allow the client to retain control over his assets. Family limited partnerships (FLPs) provide a solution to this problem. When you place investments, a business, or real estate holdings in a FLP, you retain control of the assets while at… Read More
When you do a “fix and flip,” will the profit be considered ordinary income or capital gain? The answer can be the difference between the 20% maximum capital gain rate and the 39.6% maximum ordinary income tax rate. (And don’t forget the lurking 3.8% net investment income tax.) The tax policy of having a lower… Read More
The American Taxpayer Relief Act of 2012 (ATRA), which tried to keep us from going over the “fiscal cliff,” raised the federal estate tax exemption to $5.25 million and made permanent an estate tax concept called “portability.” How long the exemption will stay at $5.25 million (ignoring annual inflation adjustments) is anybody’s guess. “Portable” means… Read More
Many people whose small businesses qualify them for a home office deduction are afraid to take it because they’ve heard it will trigger an audit. That is not true. Changes in the rules in the late 1990s made it easier for people who work out of their homes to qualify for these deductions. If you… Read More
Every one of the 50 states, and the District of Columbia, have statutes that provide that a will must be in writing. Most of them say it must be signed “at the end,” and many of them require two or three witnesses. Nevada has a ground-breaking statute that permits digital wills, but apparently the software… Read More
There’s been a lull in publicized gun controversy — here’s a refresher for the next round of political banter — as it relates to you and your trust. In 1934, the government enacted the National Firearms Act (NFA) as an effort to stop gangster activity. In particular, the government used its taxing arm to arrest… Read More
Who gets the business? What does the will say? Many business owners make no special provisions in their wills for the business. They have so-called “simple” wills that create a complicated mess when the business owner dies. Let’s say Number One Son has been running Dad’s carpentry business while Dad is ill. Dad dies and… Read More