Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Code Sec. 1411 Material Participation by Trusts – Part 2.
This column, the second of a two-part column, concludes a series of interrelated columns dealing with the Code Sec. 1411, 3.8-percent net investment income tax (NIIT). It discusses material participation of trusts and estates, analyzing several factors that may be relevant to the determination of material participation by trusts and estates.
The full column may be downloaded by clicking the following link: Material Participation by Trusts Part 2.
On March 27, 2014, the U.S. Tax Court issued its decision for the case of Frank Aragona Trust et al. v. Commissioner, 142 T.C. No. 9, No. 15392-11 (2014). The Court held that the Frank Aragona Trust (“the Trust”) qualified for the Internal Revenue Code (“IRC”) Sec. 469(c)(7) passive activity exception. The Tax Court found that a trust is capable of performing personal services through its individual trustees and that the Trust materially participated in real property trades or business. It concluded that the Trust’s rental activities were consequently not passive.
In light of the recent imposition of the 3.8 % Net Investment Income Tax (NIIT), this ruling is especially important because any income derived from trade or activities in which a trust or estate materially participates would not be subject the NIIT. Continue reading
Some Things Change.
On May 15, 2014, Governor Martin O’Malley signed H.B. 739, which provides for the gradual increase of Maryland’s state estate tax exemption. The House passed the bill on March 7 with the Senate passing the measure on March 20. Continue reading
Almost all estate plans include a trust of some kind, and most clients want to know what limits are placed on how much of the trust’s assets a beneficiary can have access to. Often, their questions revolve around knowing how much and when can a trustee distribute trust assets to a beneficiary. More often than not, these decisions are based on criteria called ascertainable standards. Continue reading
What is Probate?
The first few months after a loved one, family member or friend passes away can often be bewildering and confusing for those who are left behind. Besides the emotional aspect of the death, many practical questions arise at this time, such as who pays for the funeral expenses, what happens to the decedent’s assets and who handles any of the legal matters that invariably occur at this time. Many of the answers to these and other questions work themselves out through the process most commonly known as probate or estate administration.
At its simplest, the probate process is the legal process that takes place after someone’s death. During the process, the decedent’s assets are located, his/her debts paid, and his/her remaining property distributed to its new owners. This process takes a minimum of eight months, but typically lasts for a year or longer. The person who is in charge of handling these issues is called the personal representative. The articles in this series are intended to assist a personal representative of a decedent’s estate (i.e., the decedent’s assets) subject to probate in the District of Columbia Superior Court. Continue reading
Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Code Sec. 1411 Material Participation by Trusts & Estates (Part 1) – Current Status and Plannning.
“This column, the first of a two-part column, concludes a series of interrelated columns dealing with the Code Sec. 1411, 3.8-percent net investment income tax (NIIT). This column deals with material participation of trusts and estates and recaps various planning suggestions that have been made to mitigate the NIIT.”
The full column may be downloaded by clicking the following link: Material Participation of Trusts & Estates Part 1 Continue reading
Lewis Saret recently posted a new article on his Forbes blog, which offers a detailed look at the Final NIIT Regulations provisions that define net investment income. Read the post here.
Lewis Saret recently posted an article on his Forbes blog, which discusses how the Final NIIT Regs determine the undistributed net investment income of trusts and estates. Read the post here.
Lewis Saret recently posted a new article on his Forbes blog, which discusses the Final Net Investment Income Tax Regulations’ treatment and classification of net investment income for charitable remainder trusts. Read the post here.