CPAs should play a more significant role than they often do in facilitating, implementing and monitoring client estate plans. National Estate Planning Awareness Week, Oct. 17–23, is an ideal time to encourage clients to address planning. To download a sample client letter on estate planning, click here. Here are
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Personal financial planning
IRS Issues Guidance on Carryover Basis Rules for 2010 Decedents’ Estates
In early August, the IRS issued guidance on the time and manner for making the election not to have estate tax apply to estates of decedents who died in 2010 (Notice 2011-66). The election must be made by Nov. 15, 2011. The notice also discusses how donors can elect out
President Signs Patent Reform Bill Banning New Tax Strategy Patents
On Friday morning, President Barack Obama signed into law the Leahy-Smith America Invents Act (HR 1249), which reforms the U.S. patent system and stops the granting of patents for tax strategies. The bill had been passed by the Senate earlier this month and by the House of Representatives in June.
Congress Passes Tax Patent Reform; Sends Bill to President
On Thursday evening, the Senate passed the America Invents Act (HR 1249) by a vote of 89–9. The Senate’s version of the bill was identical to one passed by the House of Representatives in June, and it now goes to President Barack Obama for his signature. The act reforms the
IRS Proposes New Rules for Deducting Fiduciary Fees
The IRS issued new proposed regulations Monday (REG-128224-06) intended to reflect the U.S. Supreme Court’s 2008 holding in Michael J. Knight v. Commissioner (552 U.S. 181) on income tax deductibility by estates and nongrantor trusts of investment advisory and other fees. The IRS simultaneously withdrew July 2007 proposed regulations with
Fund Advisers Face New Registration, Reporting Regs
The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010 marked the onset of major changes for financial advisers. The SEC in June followed through with rulemaking responsibilities under the new law by releasing final rules that include new registration and reporting requirements for advisers
Advising Financially Stressed Clients
Tax and financial advisers should be prepared to discuss a range of possibilities for their clients who are facing financial difficulties and help make the best choices given their circumstances and goals. Should they consider bankruptcy? If they want to avoid bankruptcy, how can they best reduce their debt? Which
SEC Issues Investor Bulletin on Retail Forex Transactions
The SEC issued an investor bulletin Wednesday highlighting some of the most significant risks that foreign currency exchange (forex) transactions may pose for individual investors. The forex market is a large and generally liquid financial market, according to the bulletin. Banks, insurance companies and other financial institutions, as well as
Tax Court Allows Deduction for Payment to Long-Term Caregivers
The Tax Court held that payments made to an elderly woman’s caregivers for personal care that she required due to her diminished capacity qualified as long-term-care services and were therefore deductible under IRC § 213(d)(1)(C) (Estate of Baral, 137 TC no. 1 (2011)). Lillian Baral was diagnosed by her physician
A Sea Change for Gift and Estate Planning
Martin Shenkman, Esq., CPA/PFS, is the author of numerous books and articles on tax and financial planning, including the AICPA-published Estate and Related Planning During Economic Turmoil, and with Steve R. Akers, Estate Planning After the Tax Relief and Job Creation Act of 2010: Tools, Tips, and Tactics. His firm,
Estate Tax or Carryover Basis?
For decedents dying in 2010, Congress provided two systems of taxing estates and determining basis of their assets. Executors of those estates must determine the better course. To do so, especially for valuations of gross estates above the new $5 million exclusion, they must take many factors and considerations into
PFP Services Guidelines
CPAs providing personal financial planning services to individual clients in estate, retirement, tax, investment and/or insurance planning need to ensure they are meeting their professional responsibilities. The AICPA Statement on Responsibilities in Personal Financial Planning Practice (SOR) provides guidance that can help protect against unforeseen risks of litigation. Here are
House Passes Bill With Tax Patent Provision, Sends Back to Senate
On Thursday, by a vote of 304–117, the House of Representatives passed the America Invents Act (H.R. 1249), which includes a provision intended to stop the granting of patents for tax strategies. The bill would deem any “strategy for reducing, avoiding, or deferring tax liability” to be prior art, and
SEC Proposes Audits of Broker-Dealers’ Custody Practices
The SEC proposed rules that it said would strengthen the annual audits of broker-dealers by requiring an increased focus on their custody activities. Current rules require broker-dealers to protect and account for customer assets. The proposed rule amendments would mandate an audit of those controls. Comments on the proposal are
Plug-In Electric Cars Get a Jolt From Tax Incentives
With manufacturers now promoting their new plug-in electric models, the cars have caught up with the buyer tax credit Congress dangled for them three years ago. CPAs’ clients are likely to ask about this and other tax breaks for plug-in electrics. Although the Chevy Volt was available only in a
Seven Good Reasons Credit Shelter Trusts Remain Relevant
At first glance, a new provision of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 might seem to have provided by law what estate planners have traditionally provided for their clients by setting up one or more trusts: a way to ensure that the estate or
Strategies for Compromising Tax Debts
Representing financially distressed individuals is becoming increasingly common with the economic difficulties many individuals and businesses have experienced in recent years. While tax practitioners know that a taxpayer can make an offer in compromise, some of the options available in making an offer are not well-known. This article addresses three
Personal Financial Planning
Seventy-nine percent of CPA financial planners have at least one baby boomer client who has delayed retirement because of the economy, according to an AICPA survey. Asked how many extra years those boomer clients expect to work, 32.3% of CPA financial planners said one to three years; 39.3% said four
Scholarships and Support
Tax preparers may have problems determining the dependency status of a student who lives with, but is not the child of, a taxpayer, especially when the student has proceeds from a scholarship or tax-deferred education account or loan. While this is not a common situation, such a scenario may require
IRS Delays Due Date for Choosing Basis Allocation for Decedents Dying in 2010
The IRS announced that it is delaying the due date for Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, past its original April 18 due date, but did not announce what the new due date will be (IR-2011-33). Therefore, for decedents who died in 2010,
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From The Tax Adviser
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