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Deductions

Computing the Charitable Tax Deduction for a Charitable Remainder Trust

The methods for calculating a charitable remainder annnuity trust and a charitable remainder unitrust are different because the CRUT income stream fluctuates with changes in the value of the trust property. The technicalities involved in determining the value of the income stream or the remainder interest are much more complex for a CRUT.

3.8% Net Investment Income Tax Regulations

The IRS issued final and proposed regulations giving guidance on the application and computation of the 3.8% net investment income tax imposed by Sec. 1411.

Draft Net Investment Income Tax Form Posted

In August, the IRS released a draft dual-purpose form that will be used by individuals and trusts and estates to compute and report the new 3.8% net investment income tax.

Estimated Amount of State Income Tax Claim Not Deductible on Estate Tax Return

The Ninth Circuit held that an estate could deduct as a claim against it only the amount of state income tax and interest with respect to the income on a transaction that the estate ultimately paid, not the amount that it estimated at the time of the decedent’s death it would have to pay on the income.

Estate May Deduct Interest on Loan Between Two Trusts

The Tax Court held that an estate could deduct as an administration expense interest incurred when a trust that was part of the estate borrowed funds to enable the estate to pay its federal estate tax.

Applying the Material Participation Standards to Nongrantor Trusts

A taxpayer may deduct losses generated from passive activities only to the extent of the income from such activities. For this purpose, any trade or business or other income-producing activity is passive with respect to a taxpayer if the taxpayer does not materially participate in the activity.

Applying the Material Participation Standards to Nongrantor Trusts

A taxpayer may deduct losses generated from passive activities only to the extent of the income from such activities. For this purpose, any trade or business or other income-producing activity is passive with respect to a taxpayer if the taxpayer does not materially participate in the activity.

Charitable Deduction for Partial Disclaimer Allowed

The Eighth Circuit held that a partial disclaimer of an interest in an estate was valid and that the estate was entitled to a charitable deduction for the portion of the disclaimed amount that was given to a charitable foundation.

employee benefits & pensions

Abstract image of pie chart, with pieces being pulled from several directions. IMAGE BY VECTORMINE/ADOBE STOCK

Profits interests: The most tax-efficient equity grant to employees

By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.

Tax Clinic

Proposed regulations issued on retirement catch-up contributions

IC-DISC commission payment provisions

The role of REITs for foreign investors in US real estate

Signing partnerships’ returns and other tax documents

Practical considerations for taxpayers and advisers following Loper Bright and Corner Post