Estates

Final regs. eliminate estate and gift tax clawback

The IRS issued final regulations that reconcile the current higher exclusion for the estate and gift tax unified credit amount in effect under the law known as the Tax Cuts and Jobs Act with the lower unified credit, which is scheduled to go into effect in 2026, eliminating a possible future clawback of the higher exclusion amount.

Recent developments in estate planning: Part 1

This article is the first of two parts of an annual update on developments in trust, estate, and gift taxation. Part 1 discusses developments affecting trusts and the generation-skipping transfer tax, as well as inflation adjustments.

Unexpected tax bills for simple trusts after tax reform

Post-TCJA, expenses that are miscellaneous itemized deductions are taken into account in computing trust accounting income but are now nondeductible in computing taxable income and distributable net income for the trust.

Estate planning for digital assets

A well-drafted estate plan should address the management and distribution of digital assets to mitigate additional administrative burdens on fiduciaries.

Estate planning for the other 99%

The implications of the TJCA's large increase in the estate and gift tax exemption are complex and affect estate planning for everyone, not just the small percentage of the population who will still file estate tax returns.

Using trusts to shift income to children

Use of a Sec. 2503(c) or minor’s trust allows for transfers of property (and income shifting) to children, while parents maintain control of the property at least until the child reaches age 21.

Supreme Court holds North Carolina cannot tax trust

The U.S. Supreme Court issued a unanimous decision holding that North Carolina’s attempt to tax a trust based solely on the residence of a beneficiary violates the Due Process Clause of the 14th Amendment.

New limitation on excess business losses

The TCJA amended Sec. 461 to include a subsection (l), which disallows excess business losses of noncorporate taxpayers if the amount of the loss is in excess of $250,000 ($500,000 in the case of a joint return).

Newsletter Articles

TAX REFORM

Traps for the unwary: Tax Cuts and Jobs Act changes

By now many of us are familiar with the various provisions of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. Here is a list of changes together with (perhaps) unexpected nuances.

DEDUCTIONS

Qualified business income deduction regs. and other guidance issued

The package includes final regulations, guidance on how to calculate W-2 wages, a safe-harbor rule for rental real estate businesses, and new proposed rules on the treatment of previously suspended losses.