Taxpayer Wins Major Gift Tax Valuation Case
Mr. Jones established three trusts for his daughters in May 2009. He gifted voting and non-voting stock of Seneca Sawmill Co. (“SSC”) and limited partnership interest of Seneca Jones Timber Co. (“SJTC”) to the trusts. Together these entities operated a lumber and timber business. Mr. Jones filed a gift tax…
IRS Releases Inflation-Adjusted Amounts for 2020
The income tax brackets, standard deduction amounts, and many other tax items are adjusted annually for cost-of-living increases. On Tuesday, November 6, 2019, the IRS released the adjustments that will apply for the 2020 tax year. Below is a highlight of some of those adjustments. Ordinary income. For married individuals…
Van Riper v. Director, Division of Taxation: New Jersey Supreme Court Hears Important New Jersey Inheritance Tax Matter
On October 8, 2019, the Supreme Court heard oral arguments in the case of Van Riper v. Director, Division of Taxation, 2018 WL 4761357 (App. Div. October 3, 2018). This case involves an inheritance tax dispute in which the New Jersey State Bar Association (NJSBA) filed an Amicus (Friend of…
Interest Expense No Longer Characterized As Investment Interest
The Tax Court, in the case of William C. Lipnick v. Commissioner, No. 1262-18, 153 T.C. No. 1 (2019), addressed the treatment of interest expense that was initially related to a debt-financed distribution. William Lipnick, the taypayer in the case, received interests in a partnership by gift and bequest from…
When is an Inheritance a Part of Property to be Divided in the Divorce?
A recent New Jersey divorce case has important implications for estate planners. It holds that an inherited asset is not subject to equitable distribution in divorce. Rosen v. Rosen, 2019, N.J. Super. Unpub. LEXIS 1509 App. Div. (July 3, 2019) Sometimes clients will ask their estate planner, if I…
Penalty Relief for CBT Taxpayers
The New Jersey Division of Taxation has announced penalty relief for taxpayers who made timely requests for an extended filing date for their 2018 New Jersey Corporation Business Tax Returns. Originally, the extended filing date for a 2018 calendar year corporation was October 15, 2019, the same due date as…
S Corporation Shareholder Denied $8,000,000 Loss Deduction Due to Poor Structure of Loan
An S corporation does not pay federal income taxes. Instead, its income or losses pass through to its shareholders, and they report the income or loss on their federal individual income tax returns. A shareholder can deduct losses, but only up to the adjusted basis of the shareholder’s stock and…
New Jersey Passes Wage Theft Act: What Employers Need to Know
On August 6, 2019, New Jersey Acting Governor Sheila Oliver signed into law the New Jersey Wage Theft Act (the “Act”), P.L. 2019, c.212, modifying New Jersey’s existing wage and hour laws. Except for certain provisions dealing with criminal offenses, the Act took effect immediately upon enactment. The Act provides…
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…