WHEN CAN STATES TAX TRUST INCOME? THE U.S. SUPREME COURT PROVIDES LIMITED GUIDANCE
U.S. Supreme Court provides guidance (although minimal) on the interstate income taxation of Trusts. North Carolina Department of Revenue vs. Kimberly Rice Kaestner 1992 Family Trust, 139 S. Ct. 2213, 588 U.S. (June 21, 2019). When an individual owns several homes and travels between them, spending time in…
New Jersey Employers Required to Offer Mandatory Pre-Tax Transportation Fringe Benefits
On March 1, 2019, Governor Phil Murphy signed into law Senate Bill No. 1567, “An Act concerning pre-tax transportation fringe benefits” (“Act”), which requires New Jersey employers with at least 20 employees to offer pre-tax transportation fringe benefits to its employees. Transportation fringe benefits include employees’ costs incurred for alternative…
Appellate Victory for Kulzer & DiPadova
In the Matter of the Estate of Kershak, N.J. Super. App. Div. Eric A. Feldhake and Daniel L. Mellor prevailed for their clients on six of the six issues brought on appeal. The Court found the case potentially included exceptional circumstances that would warrant relief under Rule 4:50-1(f) and the…
Is Registered Mail the Way to Go?
Prior to 1954, the law treated tax documents as timely filed provided the document was physically delivered to the Internal Revenue Service (“IRS”) by the applicable deadline. This rule left taxpayers with no recourse should timely mailing have occurred but through no fault of the taxpayers (e.g. postal service misplacing…
Kulzer & DiPadova Attorneys Named 2019 SuperLawyers
Congratulations to the five attorneys at Kulzer & DiPadova, P.A. who were recognized by New Jersey Super Lawyers* Magazine for 2019. The following attorneys were recognized as New Jersey SuperLawyers for 2019 in these primary practice areas: Arthur A. DiPadova – Estate Planning & Probate, Tax James B. Evans Jr. – Tax Glenn A. Henkel – Estate…
Is My Client’s Small Business Subject to the Business Interest Expense Limitation?
Beginning in 2018 the federal income tax deduction of business interest can be limited. The law provides a “small business” exception to this limitation. However, businesses conducted in multiple related entities must be combined when determining if the small business exception applies. The limitation on business interest expense was originally…
Taxability of Refunds of Paid State and Local Taxes
Internal Revenue Code (“I.R.C.”) § 164(a)(1) provides state and local property taxes and state and local income taxes are allowed as a deduction against income for the year within which such taxes are paid. However, I.R.C. § 164(b)(b) limits the aggregate amount (the “SALT Limit”) of the deduction to $10,000.00…
Ninth Circuit Rejects IRS Argument as to What Constitutes Reasonable Third Party Notice in Summons Case
I.R.C. Section 7602(c) prohibits the Internal Revenue Service from contacting any person other than the taxpayer with respect to the determination or collection of a tax liability of the taxpayer unless the taxpayer is provided reasonable notice in advance that third party contacts may be made. This prohibitive rule does…
New Reporting for Partner Negative Capital Account Balances
Partners and members of an LLC taxed as a partnership will often have negative or deficit capital account balances at the end of a taxable year. A negative capital account balance is permissible if supported by proper allocation of partnership debt (or an obligation to restore a deficit). The new…
Final Regulations under Section 199A Create Safe Harbor for Rental Real Estate, Exclude Triple Net Leases
On January 18, 2019, the Treasury Department and the Internal Revenue Service (IRS) issued final regulations under new Section 199A and three related pieces of guidance. Created by the 2017 Tax Cuts and Jobs Act (TCJA), Section 199A allows eligible taxpayers (individuals, trusts and estates) to deduct up to twenty…