News & Insights

Say Goodbye to the Stretch IRA Under the SECURE Act

IRA

IRAs and 401(k) plans are popular investment vehicles because of the tax benefits. Assets deposited into these accounts are only subject to income tax when they are withdrawn. The IRS sets a certain age at which withdrawals must start (currently 72) and provides for annual “required minimum distributions (RMDs).” These RMDs are calculated based on … Read more

U.S. Supreme Court Limits State’s Right to Tax Trust Income

trust tax

If you are considering creating a trust, there are many considerations including analyzing the tax consequences. Taxation can get complicated if the trust, trustee, and beneficiaries are in different states with varying laws. Not surprisingly, many states are eager to tax trust income. The U.S. Supreme Court recently addressed this issue in North Carolina, but … Read more

The new tax law means it is time to review your estate plan

The new tax law has gotten a lot of media coverage in New York mostly because of the loss of the State and local tax deduction and the end of the “Obamacare” health insurance individual mandate. Less attention is paid to the significant estate and gift tax changes contained in the law. These provisions may … Read more

Obtaining Disclosure of Tax Returns in Litigation

Information contained in income tax returns can be relevant to various types of disputes. Therefore, parties may seek to “discover” the other party’s tax returns. However, courts generally do not require the disclosure of tax returns —even when the returns may be relevant—due to their private and confidential nature. Instead, courts apply a strict standard to … Read more

Tax Benefits of Converting a C-Corporation to an S Corporation

Many small companies are set up as Type “C” Corporations (“C Corp”), particularly those which have been in existence for many years. However, C Corps are subject to double taxation, and as a result, businesses may want to consider converting to an S Corporation (“S Corp”) to reap the tax benefits.

Tax treatment of C Corps vs S Corps

C corporations must pay taxes on earnings at the corporate level. In addition, their shareholders are also separately taxed on amounts distributed to them as dividends. Therefore, each dollar earned by a C Corp is taxed twice before it reaches the hands of the corporation’s shareholders.

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Tax Benefits of Using Your IRA Distributions to Donate to Charities

Donating to charity your IRA distributions can be an excellent way to both support causes that are meaningful to you and reduce your taxes. Fortunately, a provision of the Internal Revenue Code, which gives donor’s a significant tax benefit, was made permanent at the end of 2015 so individuals can now take advantage of the rules as an integral part of their tax and estate planning.

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Minimizing Taxes When Inheriting Stock in an S Corporation

Generally, property you inherit from a decedent receives a “step-up” (increase) in basis equal to the fair market value of the property at the time of death. The step-up is potentially valuable as it allows the beneficiary to avoid paying capital gains tax on any appreciation in the value of the asset prior to the decedent’s death upon the future sale of the inherited property. However, when it comes to inheriting shares of stock in an S corporation, beneficiaries can be hit with a significant tax bill if they are not careful about selling property owned by the corporation.

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Can Trusts take advantage of the tax benefits of S corporations?

When it comes to tax planning, business owners should learn the difference between a C and an S corp trusts.

The letters refer to the subchapter of the federal tax code relating to the income taxation of corporate structures. For businesses, S corporations can provide a way to avoid the kind of double taxation that C corporations incur.

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