A recent publication by the U.S. Government Accountability Office highlights the increasing IRS trend of auditing returns that include items likely to involve an appraiser. A primary focus is on gift and estate returns, which often include such items. IRS technical advisors identified several gifts as being likely to involve an appraiser, including:
• Retirement plans
• Personal residence
• Real estate, improved
• Real Estate partnerships
• Other limited partnerships
• Art
If you are considering gifting your business make sure to have a certified business valuator appraise it. You’ll be happy you did if the IRS should ever come knocking.
Jeffrey Urbach Awarded Certificate of Excellence from NACVA
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
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
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
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
Selling Investment Real Estate in New Jersey? Beware of the “Exit Tax”
If you’re a non-resident selling investment real estate in New Jersey, there’s a unique NJ withholding tax you should be aware of. Both residents and non-residents always had to pay income tax on the gain upon the sale of real estate. This tax is required to be withheld for non-residents. The “Exit Tax”, which came into law six years ago, requires the seller to file a GIT/REP form (Gross Income Tax form) in order to record a Deed for the transfer of his property. When a non-resident sells the property, New Jersey will withhold this income tax in the amount of either 8.97 percent of the profit or 2 percent of the total selling price, whichever is higher. Therefore, even if the property is sold at a loss, tax must be withheld to fulfill the two percent requirement. When such a seller eventually files his NJ tax return he is refunded the difference between what was withheld and what was owed. [Read more…] about Selling Investment Real Estate in New Jersey? Beware of the “Exit Tax”