News Items of Interest

Itemizing Your Home

Wed, 21 Dec 2011 15:56:08 -0600

After one of my acquaintances suffered the ravages of a flood in his house caused by a leaking pipe, the difficulties of settling an insurance claim became crystal clear. Maybe it is time to get down to the tedious business of itemizing my own house and its contents. Of course, like many other things in life, there are programs available that will assist in completing this project. A recent article in the Wall Street Journal looked at several of those programs and discussed there possible use. You might find it of interest.

Congressman Proposes Raising the Estate Tax

Wed, 23 Nov 2011 09:09:40 -0600

Rep. Jim McDermott, D-Wash, senior member of the tax-writing House Ways and Means Committee, has introduced a bill to Congress to raise the estate tax. According to an article published by Accounting Today, the bill would bring the estate tax back to its pre-2001 levels.

See Michael Cohn, "Congressman Proposes Raising the Estate Tax," Accounting Today (Nov. 21, 2011)

DIRTY DOZEN TAX SCAMS

Fri, 8 Apr 2011 08:30:11 -0500

On April 7, 2011, the IRS issued a press release entitled "Don’t Fall Prey to the 2011 Dirty Dozen Tax Scams"Hiding income in offshore accounts, identity theft, return preparer fraud, and filing false or misleading tax forms top the annual list of “dirty dozen” tax scams in 2011, the Internal Revenue Service announced today.

“The Dirty Dozen represents the worst of the worst tax scams,” IRS Commissioner Doug Shulman said. “Don’t fall prey to these tax scams. They may look tempting, but these fraudulent deals end up hurting people who participate in them.”

THE NEW, BUT TEMPORARY, ESTATE AND GIFT TAX LAW

Wed, 6 Apr 2011 15:59:11 -0500

March 25, 2011

Dear Friends

This letter is to acquaint you with the estate and gift tax changes in the Tax Relief Act that was enacted on December 27, 2010. The Act significantly changes the federal estate and gift tax laws. For many of you, the changes will influence your estate and gift planning documents and will provide significant estate and gift planning opportunities.

Please call us to schedule an appointment to meet to review your current estate plan and discuss how you and your family can make the best use of the new estate and gift tax rules. Also, we would be proud to show you our new office.

IMPROVING LIFE AFTER INTENSIVE CARE

Sat, 26 Feb 2011 17:20:29 -0600

An article in the Wall Street Journal earlier this month addressed the issue of how hospitals care of patients who are in intensive care units. It contains suggestions as to questions to ask medical staff to ensure that the patient is receiving the most appropriate care under the circumstances. The article is a must read for those of us who may be placed in the position of acting as a patient advocate for a loved one.

FACEBOOK PRIVACY: 10 MUST-KNOW SECURITY SETTINGS

Fri, 25 Feb 2011 15:35:45 -0600

I confess – I am on Facebook to keep up with my siblings, children, nieces, nephews and a few “old” friends. However, I have always been concerned about the privacy of information that is posted on Facebook by me or my Facebook “friends.” Therefore, I found this slideshow from PCWorld interesting, informative and useful and wanted to share it with those of you who are also on Facebook.

LETTER OF FINAL INSTRUCTIONS

Mon, 7 Feb 2011 16:42:58 -0600

A Letter of Final Instructions is not a legal document but a road map to guide your survivors through the maze that each of us creates during our lifetime. Not only will its preparation guide your loved ones following your death, it will help you organize and consolidate the information that you must deal with during your own lifetime or that others might require in the event of your disability due to a serious accident or illness. It may require significant effort on your part, but the assistance that it provides may turn out to be beyond measure to your family.

Below is a list of items that you may want to consider for your own final letter of instructions. If you think of additional items that should be added to the list, please contact me directly.

PLAIN WRITING ACT OF 2010

Thu, 30 Sep 2010 14:52:41 -0500

As a proponent of the use of "plain English" in the preparation of legal documents and one of the authors of an article that appeared in the Michigan Bar Journal entitled: "Legalese and the Myth of Case Precedent," 64 Mich. B.J. 1136 (1985), I found the passage by the Senate on September 27, 2010, of the Plain Writing Act of 2010 encouraging.

On that date, the Senate by unanimous consent passed H.R. 946, the “Plain Writing Act of 2010,” which, broadly speaking would require regulatory agencies, including IRS, to issue some forms of guidance in “plain writing.”

The bill would require each federal agency, by one year after enactment, to use plain writing in every “covered document” of the agency that it issues or substantially revises. A covered document would be defined to: (1) mean any document that is relevant to obtaining any federal benefit or service or filing taxes, that provides information about any federal benefit or service, or that explains to the public how to comply with a requirement the federal government administers or enforces; (2) include (whether in paper or electronic form) a letter, publication, form, notice, or instruction; and (3) exclude a regulation.

PLAN AHEAD FOR YOUR DIGITAL DEMISE

Fri, 11 Jun 2010 11:15:20 -0500

On May 25, 2010, I posted an item entitled "Plan for Continued Access to Digital Assets Upon Death or Disability."

Following up on that entry, I wanted to bring to your attention an interview on the NPR radio show called Talk of the Nation on June 9, 2010, in which the host, Neal Conan, interviewed Robert Roper, a columnist for Obit Magazine, about "digital death." A written transcript of the interview, as well as the recorded interview is available for your consideration.

The Bipartisan Tax Fairness and Simplification Act of 2010

Thu, 10 Jun 2010 13:38:48 -0500

On February 23, 2010, The Bipartisan Tax Fairness and Simplification Act (BTFS) of 2010 was referred to the U.S. Senate Committee of Finance for consideration. The bill proposes numerous changes to the Internal Revenue Code as well as the continuation of cuts, some set to expire this year, such as the Earned Income Tax Credit. The bill establishes a new Retirement Savings Account and a new Lifetime Savings Account to consolidate the three existing types of IRAs, allowing couples to set aside as much as $14,000 in tax-free savings.

Also among the bill's objectives is a change to how capital gains and dividends are taxed. Under BTFS, 35% of capital gains from investments held for 6-12 months, not exceeding $500,000, would be tax free. To the extent of 35%, any gains from investments held longer than a year and income from qualified dividends would be tax free. Qualified dividends are generally dividends from any share of stock in a domestic corporation or a foreign share of stock that is readily tradable on an established security market. Further progress on the bill will not be made until it is scheduled for consideration on the calendar of the Senate Committee on Finance; as of June 9, 2010, we have no information on when that will be.

Appraiser Must Sign Appraisal and Form 8283 Per IRS Chief Counsel Advice

Tue, 8 Jun 2010 11:00:32 -0500

A Portion of the E-mail is quoted below:

Sent: Wednesday, May 05, 2010 12:29:09 PM
Subject: Who signs form for appraisal

This is to confirm our conversation regarding who can sign Part III (Declaration of Appraiser) on Form 8283 and the corresponding appraisal. As discussed, Form 8283 and the appraisal may not be signed by the appraisal firm. Both documents must be signed by the individual who completed the appraisal.

The language contained in Part III of Form 8283 and the instructions clearly indicate that the individual appraiser must sign the form and acknowledge that a false or fraudulent overstatement may subject the individual to a penalty under section 6701(a). Section 170(f)(11)(E) and Treas. Reg. sections 1.170A-13(c)(3) and (5) state that a qualified appraisal is conducted by a qualified appraiser who is an individual meeting specific requirements. Treas. Reg. section 1.170A-13(c)(5)(iii) further states that if 2 or more appraisers contribute to an appraisal, each appraiser must sign the appraisal. The statutory language defining an appraiser as an individual and the regulations requiring each individual appraiser who works on the appraisal to sign the appraisal clearly indicates that a person, not a firm, must sign Form 8283 and the appraisal.

TEMPORARY REPEAL IN 2010 OF ESTATE AND GENERATION-SKIPPING TAXES REQUIRES YOUR ATTENTION

Tue, 25 May 2010 08:39:39 -0500

Dear Friends

As you may already know, the federal estate tax rules changed drastically in 2010, and could change radically again in 2011. We want to advise you of what has happened and encourage you to review and re-evaluate your estate plan as soon as possible.
Congress passed legislation in 2001 that had the following results:
• The federal estate and generation-skipping taxes were repealed for one year commencing on January 1, 2010. The gift tax remains in effect with a $1.0 million lifetime exemption and a top gift tax rate of 35%.
• The step-up in basis rules (which gave a "fresh-start" fair market tax basis for most assets inherited from a decedent) were replaced with adjusted carry-over basis rules. These new basis rules permit a step-up in basis of up to $1.3 million for assets inherited by all heirs and an additional $3.0 million for assets bequeathed to a spouse.

PLAN FOR CONTINUED ACCESS TO "DIGITAL ASSETS" UPON DEATH OR DISABILITY

Tue, 25 May 2010 08:27:43 -0500

If you, like many others, rely upon email, social networking, and e-commerce, you must give serious consideration to what will become of your accounts and how they will be accessed in the event of your death or disability. In such cases, internet service providers may require court orders to allow access to your family or have other burdensome documentation requirements. As a result, access to email accounts that provide billing notices and business communications and online bank and brokerage accounts may be unavailable to family members for lengthy periods of time following the onset of a disability or death.

Legal Guide for the Seriously Ill Released by the ABA

Wed, 17 Feb 2010 14:41:31 -0600

Press release from American Bar Association

WASHINGTON, D.C., Dec. 18, 2009 -- The onset of a serious illness or injury can affect much more than a person’s health. Knowing what steps to take to get one’s financial and legal affairs in order is often vitally important not only to the affected individual, but to his or her loved ones as well.

The "Legal Guide for the Seriously Ill" -- a project by the American Bar Association Commission on Law and Aging commissioned by the National Hospice and Palliative Care Organization -- was designed for both the seriously ill individual and those caring for someone who is seriously ill. The guide explains “Seven Key Steps” in a brief, clear way while offering additional tips and resources for readers looking for more detailed information and guidance.

Senate passes bill to permit 2010 Haitian relief contributions to be deducted on 2009 returns

Mon, 25 Jan 2010 15:59:17 -0600

RIA Checkpoint reports that on January 21, the Senate by voice vote approved H.R. 4462, a bill that would allow donors to accelerate the income tax benefits of charitable cash contributions for the relief of victims of the earthquake in Haiti. The bill had previously been passed by the House on January 20 by voice. The bill is now cleared for signature by the President, which is expected to occur this week.

When signed the bill will allow individuals who make charitable contributions to aid Haitian earthquake victims to elect to claim an itemized charitable deduction on their 2009 tax return (instead of having to wait until next year to claim the deductions on their 2010 tax return). The election would apply only to Haitian relief contributions made in cash after Jan. 11, 2010, and before Mar. 1, 2010. If the election is made, Haiti relief donations would be deductible on the 2009 return, not the 2010 return.