MATTHEW S. BEARD, P.C. ––––––––TAX ATTORNEY–––––––– TAX, ESTATE, TRUST, AND PARTNERSHIP
Legal representation
for the
transfer and taxation
of property
Estates follow a life cycle pattern of growth, maturity, and termination. With proper planning and administration, this cycle occurs over multiple generations.
We work with clients and their advisors on tax and other legal issues for estates, trusts, and partnerships.
New
Inflation Adjustments for 2025
The Service published Rev. Proc. 2024-40, which sets forth inflation adjusted items for 2025. Increases are beneficial for tax planning.
Many entities are now required to file BOI reports with information about their owners. The due date was January 1, 2025. Broad language may lead to surprise results.
The disposition of a residence receives favorable income tax treatment. I.R.C. § 121 excludes from gross income the gain from a sale of a principal residence, and I.R.C. § 1014 provides a new basis for a residence acquired from a decedent. These provisions potentially permit income tax free appreciation and, thus, encourage investment in a residence. The disposition decision, however, involves multiple paths that lead to different results. This article examines income tax rules that incentivize investment in a residence and the implications of transferring a residence.
A joint interest is often used as an estate planning tool to avoid probate. The corresponding tax implications, however, are not favorable. I.R.C. § 2040 generally requires inclusion of the entire value of a joint interest in the gross estate, rather than the decedent’s interest therein. Only exceptions take underlying economics into account, and the executor bears a burden of proof that may prove difficult to meet. This article reviews the tax implications of a joint interest.
Disclaimer Planning: No Coin Toss Needed for Unpredictable Tax Law
A disclaimer provides flexibility in estate planning to address unpredictable tax law, particularly with respect to the basic exclusion amount under I.R.C. § 2010(c) that is in a state of flux. The focus of disclaimer planning is to provide the surviving spouse with an option to arrange for favorable income tax results, such as a new basis under I.R.C. § 1014(a), where no estate tax is due. This article reviews requirements for a qualified disclaimer under I.R.C. § 2518, presents components of a disclaimer trust structure, and analyzes implementation of a disclaimer for small, medium, and large estates. With disclaimer planning, a coin toss is not needed to address unpredictable tax law.
This two-part article examines three approaches to cure the discrepancy between I.R.C. § 1014 and I.R.C. § 1015, as well as drafting and reporting considerations for the exercise of a grantor's substitution power.
The personal representative of a decedent's estate is subject to a potential risk of personal liability for paying a debt of the estate before paying a claim of the U.S. With proper planning and estate administration, the risk of personal liablity is avoided. This article summarizes the federal priority statute, recurring fact patterns, and options for addressing liens and the risk of personal liability.
The Internal Revenue Code provides favorable income tax rules that impact all individuals. There is a risk, however, of inadvertently foregoing favorable results. This treatise provides a resource for income tax considerations in estate planning.
