Deductions
Income tax charitable deductions for trusts and estates are governed by Sec. 642(c) — these rules are substantially different from the rules for charitable contribution deductions for individuals and corporations under Sec. 170.
The IRS issued final regulations for distinguishing trusts’ and estates’ allowable deductions from miscellaneous itemized deductions currently suspended by the TCJA.
The IRS issued final regulations for distinguishing trusts’ and estates’ allowable deductions from miscellaneous itemized deductions currently suspended by the law known as the Tax Cuts and Jobs Act.
The proposed regulations make clear that some deductions, including deductions for administrative
expenses, are still available despite the TCJA’s suspension of miscellaneous itemized deductions.
The IRS issued proposed regulations to clarify that certain deductions are allowed to an estate or nongrantor trust because they are not miscellaneous itemized deductions.
The IRS issued proposed regulations to clarify that certain deductions are allowed to an estate or nongrantor trust because they are not miscellaneous itemized deductions.
There are various planning opportunities for nonstandard donations and potentially unintended consequences if the donation is not made following
the rules governing the specific area of tax.
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.
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).
Allowable charitable contribution deductions and control over donated funds are key factors for taxpayers to weigh when considering alternatives to private foundations.
Regulations are anticipated to clarify that the costs of trust or estate administration that are deductible under Sec. 67(e)(1) are not miscellaneous itemized deductions and, therefore, their deductibility has not
been suspended by Sec. 67(g).
The IRS provided the procedures same-sex married couples should use to recalculate the transfer-tax
treatment for property transferred to spouses.
For estates, fraud loss need only to have arisen from theft to qualify for a theft deduction.
An estate could take a theft loss deduction where a Ponzi scheme rendered an interest in an LLC the estate owned worthless.
The Tax Court held that the IRS had properly taken into account events that occurred after the decedent’s death in determining the value of property for purposes of an estate’s charitable deduction.
Earlier this year, the Tax Court held that a trust qualified for the Sec. 469(c)(7) real estate professional exception and materially participated in its rental real estate business under Sec. 469(h) through the activities of its trustees.This item focuses on the material participation portion of the decision.
The Tax Court held that a trustee's activities in a trade or business of a trust was work performed by an individual, and, therefore, it was possible for a trust to qualify for the Sec. 469(c)(7) exception to the treatment of rental real estate activities as per se passive activities.
This item details some charitable giving options for owners of closely held businesses, the applicable unrelated business income and self-dealing rules, and best practices for taxpayers who have these charitable desires and restrictions.
The Tax Court held that a trust materially participated in its rental real estate business and therefore could deduct the losses it incurred in conducting those activities as losses from nonpassive activities.
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.
