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In theory conservation easements are simple- a landowner grants a perpetual easement on a portion of his land for a charitable purpose and gets an income tax deduction for the reduction in value to the land encumbered by the easement.   Many wealthy landowners have successfully done conservation easements.  However, they have been highly abused over the years with inflated appraisals and syndication of the concept. Recently, the Tax Court in Pine Mountain Preserve channeled Meatloaf’s…
Proposed regulations on Qualified Opportunity Funds (QOF) were released at the end of October.  The regulations are complex, and a complete analysis is beyond the scope of a blog post.  However, there are some interesting provisions to note:  There was some confusion over whether the deferred gain had to be recognized 12/31/2026 if the property is not sold.  The answer is “yes.” Investment in a QOF can be directly in a Qualified Business Zone Property…
S corporations are pass through entities, but lack the flexibility of partnerships.  When more than 20% of the stock of an S corporation is sold, the issue arises as to how to account for income to the shareholders during the year.  The default rule is to wait until the the end of the year, determine income for the year and then allocate it on a per day basis.  For example, if shareholder A owns 50%…
The common wisdom is to select an LLC for a new business.  That wisdom needs to be scrutinized.  Sure forming an LLC is easy.  Generally, the filing fees are less than a corporation, and the documentation is less complicated. While the LLC may remain the best choice for an investment, it can create issues for an operating business.  With the corporate tax rate now only 21%, the tax advantages of an LLC have diminished.  Yes,…
Contained in the TCJA, qualified opportunity zones are a new tax incentivized investment vehicle aimed at encouraging investment in low-income housing.  Here are the highlights:  If a taxpayer has a realized capital gain, taxpayer can invest the gain in a Qualified Opportunity Fund within 180 days and defer the capital gain.  A Qualified Opportunity Fund is an investment vehicle that holds at least 90% of its assets in Qualified Opportunity Zone Property. A Qualified Opportunity…
Many times we shy away from doing the hard things that we need to do to improve.  For example, in golf everyone is trying to get more distance.  Many try to get there by getting a super light driver or buy the latest get long quick training aid.   In reality, you get longer by training the golf muscles hitting golf balls.  One of the best drills for both distance and quality of the strike is…
On August 8, 2018 the Treasury issued proposed regulations under Code Section 199A, a provision that was part of the 2017 tax act that provides a 20% deduction on “qualified business income.”  Code Section 199A is a very complex provision, but every business owner needs to be advised as to whether it applies to the business owner and, if so, whether the business owner should structure his business to claim it or whether he or…
The legal role of the probate lawyer is to admit the decedent’s will to probate, advise the newly appointed executor on their responsibilities and duties, help the executor inventory all of the assets of the decedent’s estate, settle debts and distribute the assets to the beneficiaries named in the will.  Of course, numerous legal issues may arise, which complicate this basis process, but that is the essential role of the probate lawyer in the conventional…
Many times I have the family of the second spouse contact me regarding probate of his or her estate.  As I discuss the matter I learn that the first spouse died years earlier, and, since everything passed to the second spouse, no probate was done for the first spouse. While this isn’t an insurmountable problem, it does complicate the probate process.   If the first spouse died more than four years ago, the first spouse’s will…