While the recent IRS crackdown has increased awareness of filing requirements for foreign assets and income, the requirements regarding foreign inheritances are much less well known. As a rule, there is never a recipient income tax liability on foreign inheritances. Estate tax (for which the estate is liable), is a different matter. If the person leaving the foreign inheritance is a U.S. citizen then it would be subject to estate tax. If not, there is no estate tax liability. [Read more…] about Do I Have To Report My Foreign Inheritance?
New Jersey Refund Status Now Available Online
The NJ Division of Taxation has added a new service that allows taxpayers to check the status of their NJ tax refund online. Taxpayers will need the Social Security number that was listed first on their return and the amount of the requested refund. To check your refund status, click here: Where’s My NJ Refund?
Forgot to File a Gift Tax Return? IRS Letter May Be On Its Way
Did you transfer your home or property to your children? Even if they weren’t technically gifted, did you “sell” them for a dollar? If you failed to file a gift tax return, there may be an unwelcome IRS letter arriving in your mailbox soon. The IRS is currently scrutinizing real estate transfers in 15 states – yes, New Jersey and rest of tri-state area included – with additional states likely to be added. It has found that 60-90% of gratuitous non-spousal real estate transfers were not reported on gift tax returns. Perhaps you are thinking “OK, so I’ll be more careful about this in the future but unless the IRS audits me I’m fine”-think again! If you make future taxable gifts requiring the filing of gift tax returns, those returns must disclose your prior gifts. If you do not include a gift from a prior year, the future return is false. [Read more…] about Forgot to File a Gift Tax Return? IRS Letter May Be On Its Way
How Litigation Affects Your Taxes
You have money coming to you from a pending law suit, but you’re wondering whether Uncle Sam will want a share of it. The answer varies, depending on various factors such as how you were damaged, how the case is resolved and more. Here are a few facts you should know before negotiating a settlement. [Read more…] about How Litigation Affects Your Taxes
Have an Office Outside the Home? You Can Still Deduct Home Office Expenses
You may have heard that your home office expenses may not be deducted if you already have an office outside the home. This is a common misconception. While it is important to carefully examine the language of the Tax Code, in most instances it is perfectly permissible. IRS publication 463 states, “You can have more than one business location, including your home, for a trade or business.” Sounds good, but what qualifies as an administrative office for your business? The IRS in publication 587 says: “Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements: [Read more…] about Have an Office Outside the Home? You Can Still Deduct Home Office Expenses
NJ Court Clarifies Contingent Interest for Estate Asset Valuation
NJ Inheritance Tax is computed on the clear market value of property transferred, valued at the date of death. In the Estate of Claire Schinestuhl,the NJ Division of Taxation determined that the shares of a publicly traded company inherited by the decedent, Claire, from her brother, Prescott Schinestuhl must be separately valued as of the date of Claire’s death and not about two years later when the sale proceeds of the shares were distributed by her brother’s estate. [Read more…] about NJ Court Clarifies Contingent Interest for Estate Asset Valuation