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LITIGATION SUPPORT

Property Settlement Agreement Missing “Little” Detail makes for Big Consequences

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Overlooking a minute detail in the Property Settlement Agreement (PSA) is by no means as minor as it may seem. It often results in much grief, wasted time, and squandered money – for both litigants, as well as taxpayers funding the judicial system. In Dawn Zera v. Kevin Krushinski, an incomplete PSA resulted in just that.

Dawn and Kevin were divorced in Jan. 2006. The judgment of divorce (JOD) failed to designate who could claim the children as dependents on his or her tax return. While the JOD ended the marriage, an ensuing nightmare was just beginning. More than six long, costly years of litigation later, on May 22, 2012, the NJ Supreme Court ruled that the parents alternate odd and even years.

The Moral: Divorcing spouses must scrutinize the PSA, making sure the lawyers covered everything. It is wise to have a tax accountant review the PSA for all tax issues.   The investment of time and effort may spare you loads of grief.      

 

Got Unreported Foreign Assets? Get Out of Jail Free

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The FBAR: Who Should File? Do you have income overseas you forgot to report? Did Grandpa leave you his foreign bank account when he passed away? If you have foreign bank accounts holding more than $10,000 in the aggregate anytime during the year, you are required to file an FBAR (Report of Foreign Bank Accounts) by June 30th of the following year. It doesn’t matter whether the foreign accounts generate income or not; just owning them, or having signature authority, requires you to file.

What’s the Big Deal? Failure to file can result in serious consequences. The sanctions for not completing the FBAR include numerous severe civil penalties and potential prosecution followed by a term in federal prison. [Read more…] about Got Unreported Foreign Assets? Get Out of Jail Free

Jeffrey Urbach Awarded Certificate of Excellence from NACVA

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Congratulations to partner Jeffrey Urbach, who has earned a Certificate of Excellence by the National Association of Certified Valuators and Analysts (NACVA) as the 2011 Instructor of Exceptional Distinction. Jeff, a Certified Valuation Analyst, generously shares his expertise and wisdom as a regular lecturer for NACVA, greatly enriching all those privileged to hear him. Jeff is accredited in Business Valuation. His specialty is the business valuation of medical and dental practices, law offices and other professional practices.

Alimony Article in NJ Family Lawyer Written by Jeffrey Urbach

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Our litigation support partner Jeffrey Urbach has co-authored a just-released article for the New Jersey Family Lawyer magazine, June 2012 edition. The article, entitled “Alimony and Taxes,” discusses the basic rules governing alimony as well as lesser known fine points. Jeff covers alimony recapture rules, deductibility of attorneys’ fees, using QDROs to enforce alimony, and alimony trusts. [Read more…] about Alimony Article in NJ Family Lawyer Written by Jeffrey Urbach

Want to Share Your Lottery Winnings? It Could Result in Gift Tax

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Most people fantasize about what they would do if they won a multimillion dollar lottery. Hopefully part of that fantasy is to give back to parents or close relatives who have been there for them. What most people don’t realize is that they can get slapped by the IRS with a considerable gift tax as a result of this generous gesture. In a Tax Court case this is precisely what played out. [Read more…] about Want to Share Your Lottery Winnings? It Could Result in Gift Tax

Discharge of Executor IRS Liabilities

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While being the executor or executrix of an estate has its financial advantages, it can carry an enormous liability as well. Suppose Aunt Gertrude dies, leaving behind a $1 million dollar estate. You, the executor, fairly distribute the estate to the beneficiaries. Most people would assume it’s all over at that point. The shocking reality is that if Gertrude had an income or gift tax liability when she died, that liability now rests squarely on your shoulders. As far as the IRS is concerned, the executor or executrix should have kept the funds in the estate until the liabilities were paid off, even if he or she knew nothing about the tax liability at the time of the distribution. The only door they will come knocking on is yours. There is hope however, in the form of three important IRS forms that help alleviate your liability as executor or executrix: [Read more…] about Discharge of Executor IRS Liabilities