Category: Articles

Code Sec. 1411 Material Participation by Trusts— Part 2

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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.

Income Tax Alert: Tax Court Rules That Trust Qualifies For Passive Activity Exception

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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 “Income Tax Alert: Tax Court Rules That Trust Qualifies For Passive Activity Exception” →

Ascertainable Standards And Trust Distributions: What You Should Know

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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 “Ascertainable Standards And Trust Distributions: What You Should Know” →

DC Probate Administration: An Introduction

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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 “DC Probate Administration: An Introduction” →

Code Sec. 1411 Material Participation by Trusts & Estates (Part 1) – Current Status and Planning

~ lsaret

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 “Code Sec. 1411 Material Participation by Trusts & Estates (Part 1) – Current Status and Planning” →

Happy New Year from the Treasury: The Final 3.8-Percent Net Investment Income Tax Regs-Part II (May 2014)

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Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Happy New Year from the Treasury: The Final 3.8-Percent Net Investment Income Tax Regs-Part II.

“On December 2, 2013, the Treasury published final regulations (“Final Regulations”) with respect to Code Sec. 1411, which finalized the proposed regulations that Treasury released on November 30, 2012 (“Proposed Regulations”). In addition to the Final Regulations, the Treasury and the IRS contemporaneously published a new set of proposed regulations (“New Proposed Regulations”) relating to Code Sec. 1411. Part I of this column began to discuss the Final Regulations. This column, Part II, continues where Part I left off and concludes the discussion.”

Continue reading “Happy New Year from the Treasury: The Final 3.8-Percent Net Investment Income Tax Regs-Part II (May 2014)” →

Happy New Year from the Treasury: The Final 3.8-Percent Net Investment Income Tax Regs-Part I (March 2014)

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Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Happy New Year from the Treasury: The Final 3.8-Percent Net Investment Income Tax Regs-Part I.

“The health care legislation enacted in 2010, often referred to as “Obamacare,” included a significant tax provision, the Unearned Income Medicare Contribution, which has generally been referred to as the 3.8-Percent Net Investment Income Tax (NIIT). The NIIT has received a significant amount of attention among tax professionals. On November 30, 2012, the Treasury released proposed regulations that provide guidance with respect to Code Sec. 1411 (“Proposed Regs”). In response to the Proposed Regs, the IRS received numerous comments. On December 2, 2013, the Treasury published final regulations (“Final Regs”) with respect to Code Sec. 1411. In addition to the Final Regs, the Treasury and the IRS contemporaneously published a new set of proposed regulations (“New Proposed Regs”). This column, the first of a planned two-part series, will summarize the key provisions of the Final Regs.” Continue reading “Happy New Year from the Treasury: The Final 3.8-Percent Net Investment Income Tax Regs-Part I (March 2014)” →

Post-ATRA Estate Planning–Part III: Planning for Married Couples After ATRA (November 2013)

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Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Post-ATRA Estate Planning, Part III: Planning for Married Couples after ATRA (November 2013). The full column may be downloaded by clicking the following link: Post-ATRA Estate Planning, Part III: Planning for Married Couples after ATRA