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There is a larger article concerning Cryptocurrency and Estate Planning written on our Resources page; but I thought I would hit a few of the highlights here. Simply, “traditional” estate planning models, language, and documents are not sufficient to deal with the crypto asset revolution. Just a few issues come to mind: fiduciary powers may not be specific enough to administer crypto assets; investment instructions may not be specific enough to allow a fiduciary to…
On our Resources page, I have written firmly concerning a taxpayer’s obligation to file a tax return. The question of whether you have an obligation to file a tax return (when you are required to do so) is nonnegotiable. If you have a filing requirement, it is a crime to disregard it. However, whether you have a legal duty to amend a filed tax return, after discovery of an error or admission, is it different…
Very big news in the world of cryptocurrency – PayPal announced on October 21st, 2020, the launch of a new cryptocurrency service that enables its customers to buy, hold and sell crypto assets. Paypal was granted New York State’s first “conditional BitLicense. In its cryptocurrency terms and conditions, there are limits, however. PayPal’s disclaimer notes that its customers are currently not able to send crypto assets to family and friends. Although PayPal plans to expand…
Members of Congress are starting to express concerns over whether the IRS will be ready for next 2020 tax season (in 2021) – as it is still processing millions of pieces of mail that went unaddressed for months during the COVID-19 pandemic. Members of the House Ways and Means Committee sent a letter to the IRS Commissioner asking him to answer whether the IRS is prepared for the upcoming tax filing season due to the…
Receiving a Chapter 7 discharge can be an exciting time because it is a fresh start ahead. You are no longer personally liable for those personal debts existing at the time you filed your Chapter 7 Bankruptcy. But be beware of one snag in the machinery – the IRS. If an IRS federal tax lien existed at the time you filed your bankruptcy case, that federal tax lien may survive your Chapter 7 discharge. Even…
JOE BIDEN Individual Tax Rate: Taxpayers with taxable income above $400,000, increase tax rate to 39.6%. Itemized Deductions: Cap the tax benefit of itemized deductions at the 28% rate. Capital Gains/Dividends: Long-term capital gains (20%) tax increase to 39.6% (top ordinary income rate) for those with incomes greater than $1M. Tax Credits: Increase the Child Tax Credit to $8,000 ($16,000 for two or more children). Education/Student Loans: Special tax exclusion for student loan forgiveness. Corporate:…
A quick summary of the Featured Blog Article, IRS: Cage the Crypto Kraken. In that article, it is argued that an IRS cryptocurrency tax amnesty program is the best course of action now and the fairest outcome for taxpayers. Most notably, it points out that Millennials, early twenties to thirties, comprise by far the largest population of taxpayers engaging in cryptocurrency transactions; and as such, the least experienced taxpayers. Because of this, and because…
This legislative season, NC expanded its sales and use tax reach to many transactions involving digital assets, and importantly, expanded the statute of limitations on “proposed” sales and use assessments. Effective June 30, 2020 and applies to assessments not barred by the statute of limitations prior to such date Failure to Pay Trust Taxes – N.C. Gen. Stat. § 105-241.8(b)(2a) is added and provides “[i]f a taxpayer, as a trustee, collects taxes on behalf of…
For tax season 2020, there is a new cryptocurrency disclosure question on IRS Form 1040. And if you ever wondered whether the IRS is really taking cryptocurrency taxation seriously – the crypto question appears on the new 1040 before naming your Dependents. Expect to answer this question honestly: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” Crypto tax enforcement is here. In…
On October 2nd, 2020, Proposed Regulations concerning the “Achieving a Better Life Experience” Act of 2014, or ABLE accounts, became Final. ABLE accounts help people with disabilities and their families save for and pay for disability-related expenses. The contributions to ABLE accounts are not deductible, but distributions are tax free to the designated beneficiary, so long as they are used to pay for qualified disability expenses. Qualified disability expenses include housing, transportation, health, prevention and…