Information on all of the new tax increases for 2013, including the new Medicare tax, and how it will affect you!
For more information, please visit us at www.givnerkaye.com
Crossing Borders: Primer On International Taxation For Individuals - June, 2013 Bruce Givner
Basic income and estate and gift tax rules for resident and non-resident aliens. Withholding. Returns to be filed. Pre-immigration planning. Residency for tax purposes. Expatriation - IRC Section 877A. How to hold real estate (inbound planning). Effectively connected income so as to be taxed at graduated rates. What does it mean to be engaged in a trade or business. Impact of treaties. Making the election to be taxed on a net income basis. Owning real estate through a foreign corporation, and handling the branch level taxes. IRS Forms 1120-F and 1040NR. FDAP: fixed,determinable and periodical income at 30%. Partnership might be required to withhold on foreign partner's share of gain on sale of real property under Section 1445 (USRPIs) and Section 1446 (partnerships). U.S. dividends paid to foreign subject to 30% under Sections 1441 and 1442. Treaties typically reduce the rate to 5% - 15%. Use W*-BEN. FIRPTA: the Foreign Investment in Real Property Tax Act treats gain from the sale of USRPI (United States real property interest) as if trade or business and gain as ECI (effectively connected income. Does not affect the character of the gain.
For more information, please visit us at www.givnerkaye.com
20 07-23 building blocks to eliminate the estate taxBruce Givner
In 1977 Professor Cooper of Columbia Law School wrote an article that suggested the estate tax is voluntary. In 43 years, nothing has changed. Those who fail to plan, plan to fail. The elements of estate tax elimination include the discounts provided by a family limited partnership, such as lack of marketability and lack of control; thoughtful use of the lifetime estate and gift tax exclusion; private annuities, including how to meet the exhaustion test; generational split dollar; tiered entity discounts; GRATs (grantor retained annuity trusts); and SCIN-GRATs.
14 07-09 orange county bar association - int'l estate planningBruce Givner
U.S. persons with real estate in multiple countries; U.S. persons with relatives in other countries; U.S. citizens abroad; non-U.S. persons with real estate in the U.S.; residency for income tax purposes; residency for transfer tax purposes; expatriation;
15 02-19 "C" Corporation Asset Sale - Martin Ice Cream and Bross: Personal Go...Bruce Givner
The Problem of Sale of "C" Corporation - it is usually a sale of the assets. What is Personal Goodwill? What are the benefits? What are the characteristics? What happened in Martin Ice Cream to make personal goodwill so attractive? It was affirmed in Norwalk, but the taxpayer lost in Solomon and Howard. The 2014 Bross Trucking case affirmed that there is a pro-taxpayer approach as did the estate tax case of Adell. How do you do the planning for this? First, you must do it years in advance of a sale. You need to value the personal goodwill and document it.
Investing Retirement Plan Assets: What Are The Limits?Bruce Givner
The Internal Revenue Code and the Title I of ERISA (administered by the U.S. Department of Labor) have restrictions on how retirement plan assets can be invested. For example, certain investments will cause UBTI (unrelated business taxable income) to what is otherwise a tax-exempt trust. Certain investments may cause prohibited transactions with the resulting excise tax under IRC Section 4975. There are also the general fiduciary rules governing trustees generally, e.g., the duty to diversify. This handout is designed to advise the trustee and the plan sponsor on how to avoid the pitfalls.
Everything You Always Wanted To Know About Grantor (And Other Irrevocable) Tr...Bruce Givner
What is an irrevocable trust? How can it be flexible? How can the parents maintain a level of control? What makes an irrevocable trust a "grantor" trust and, therefore, disregarded for income tax purposes? What are the advantages of a grantor trust for asset protection planning and estate tax planning purposes? What are the disadvantages? How can you eliminate the disadvantages through the use of a "toggle" (or flip) switch? What are the tax return and EIN requirements for a grantor trust? What happens when the owner dies? When there is an outstanding installment note, does the owner's death trigger gain? Can a trust be treated as owned by someone other than the grantor? Do grantor trusts still make sense now that the estate tax rates are 40% and the income tax rates, in states like California, are even higher? Are grantor trusts here to stay?
Crossing Borders: Primer On International Taxation For Individuals - June, 2013 Bruce Givner
Basic income and estate and gift tax rules for resident and non-resident aliens. Withholding. Returns to be filed. Pre-immigration planning. Residency for tax purposes. Expatriation - IRC Section 877A. How to hold real estate (inbound planning). Effectively connected income so as to be taxed at graduated rates. What does it mean to be engaged in a trade or business. Impact of treaties. Making the election to be taxed on a net income basis. Owning real estate through a foreign corporation, and handling the branch level taxes. IRS Forms 1120-F and 1040NR. FDAP: fixed,determinable and periodical income at 30%. Partnership might be required to withhold on foreign partner's share of gain on sale of real property under Section 1445 (USRPIs) and Section 1446 (partnerships). U.S. dividends paid to foreign subject to 30% under Sections 1441 and 1442. Treaties typically reduce the rate to 5% - 15%. Use W*-BEN. FIRPTA: the Foreign Investment in Real Property Tax Act treats gain from the sale of USRPI (United States real property interest) as if trade or business and gain as ECI (effectively connected income. Does not affect the character of the gain.
For more information, please visit us at www.givnerkaye.com
20 07-23 building blocks to eliminate the estate taxBruce Givner
In 1977 Professor Cooper of Columbia Law School wrote an article that suggested the estate tax is voluntary. In 43 years, nothing has changed. Those who fail to plan, plan to fail. The elements of estate tax elimination include the discounts provided by a family limited partnership, such as lack of marketability and lack of control; thoughtful use of the lifetime estate and gift tax exclusion; private annuities, including how to meet the exhaustion test; generational split dollar; tiered entity discounts; GRATs (grantor retained annuity trusts); and SCIN-GRATs.
14 07-09 orange county bar association - int'l estate planningBruce Givner
U.S. persons with real estate in multiple countries; U.S. persons with relatives in other countries; U.S. citizens abroad; non-U.S. persons with real estate in the U.S.; residency for income tax purposes; residency for transfer tax purposes; expatriation;
15 02-19 "C" Corporation Asset Sale - Martin Ice Cream and Bross: Personal Go...Bruce Givner
The Problem of Sale of "C" Corporation - it is usually a sale of the assets. What is Personal Goodwill? What are the benefits? What are the characteristics? What happened in Martin Ice Cream to make personal goodwill so attractive? It was affirmed in Norwalk, but the taxpayer lost in Solomon and Howard. The 2014 Bross Trucking case affirmed that there is a pro-taxpayer approach as did the estate tax case of Adell. How do you do the planning for this? First, you must do it years in advance of a sale. You need to value the personal goodwill and document it.
Investing Retirement Plan Assets: What Are The Limits?Bruce Givner
The Internal Revenue Code and the Title I of ERISA (administered by the U.S. Department of Labor) have restrictions on how retirement plan assets can be invested. For example, certain investments will cause UBTI (unrelated business taxable income) to what is otherwise a tax-exempt trust. Certain investments may cause prohibited transactions with the resulting excise tax under IRC Section 4975. There are also the general fiduciary rules governing trustees generally, e.g., the duty to diversify. This handout is designed to advise the trustee and the plan sponsor on how to avoid the pitfalls.
Everything You Always Wanted To Know About Grantor (And Other Irrevocable) Tr...Bruce Givner
What is an irrevocable trust? How can it be flexible? How can the parents maintain a level of control? What makes an irrevocable trust a "grantor" trust and, therefore, disregarded for income tax purposes? What are the advantages of a grantor trust for asset protection planning and estate tax planning purposes? What are the disadvantages? How can you eliminate the disadvantages through the use of a "toggle" (or flip) switch? What are the tax return and EIN requirements for a grantor trust? What happens when the owner dies? When there is an outstanding installment note, does the owner's death trigger gain? Can a trust be treated as owned by someone other than the grantor? Do grantor trusts still make sense now that the estate tax rates are 40% and the income tax rates, in states like California, are even higher? Are grantor trusts here to stay?
15 07-24 Puerto Rico Income Tax IncentivesBruce Givner
Instead of expatriating, it is better to consider retaining your U.S. citizenship and becoming a resident of Puerto Rico. You sign a 20 year contract with the government. As a result, as an individual, you can pay zero federal and state tax on local interest, dividends and capital gains. The incentives for business are also phenomenal: a 4% rate with profits paid to owners tax free. A business must have 3 employees of which husband and wife can count as two.
In 1989 Alaska was the first state to allow a domestic asset protection trust. In that same year Nevada and Delaware also changed their laws to allow DAPTs (also called self-settled spendthrift trusts). The question was - for 30 years - if a person in California set up a DAPT in Nevada - could a judgment creditor in California take his judgment to Nevada and have the Nevada court enforce the judgment against the California debtor's asset protection trust. Some lawyers argued "yes," citing Art. IV, Section 1 of the U.S. Constitution, the "full faith and credit clause." Other lawyers argued "No, it would be against Nevada's public policy." Finally, in June, 2019, the South Dakota Supreme Court held that it would give "full faith and credit to the California family law court order. However, it would not give full faith and credit to the enforcement against a South Dakota trust. Will this case make it to the U.S. Supreme Court? What about the on-going divorce of Ed and Marie Borsarge? The Cameron case did not involve an asset protection trust. But certainly South Dakota, Nevada and the other states will rule the same way in a case involving an asset protection trust.
Family Limited Partnerships Update - Diagrams and Bullet Points - February 6,...Bruce Givner
Normal FLP structure for estate tax planning; modifying it to amplify the extent to which it can help add a hurdle between valuable assets and some future (not currently in existence) creditor if properly aged (4 - 7 years before there is a problem) and if it has a business purpose; important points in the event of an estate tax audit, e.g., separate counsel for the children's trust; problem of timing of the funding of the assets to the FLP versus timing of the gift of LP interests; problem of the change of California's LLC act effective 1/1/14; use of FLPs with captive insurance companies, pensions, life insurance and as an alternative to an ILIT.
How Parents Keep Control Both During Their Lifetimes And After They Are DeadBruce Givner
Irrevocable trusts are required if you want to engage in estate tax planning, asset protection planning (creditor planning) and even in a great deal of income tax (including capital gains tax) planning. However, parents are not thrilled at the idea of having to give away assets to a trust that they cannot revoke!! Do you mean that they can't change it? What if they change their minds about their children? About the trustee? Happily, there are many ways to make the parents comfortable that even though the trust itself is unable to be revoked, it is flexible. The parents, of course, pick as the initial trustee the person they trust to do whatever he or she is told without question but simply out of loyalty. More importantly, the parents can - at any time, without a reason - remove the trustee and name a new one (as long as the new one is not "related or subordinate" as defined in IRC Section 672(c)). The parents can advise the trustee to drop the assets down into a single member LLC and appoint the parents as the non-managing members. The trust can have a protector who can be given the power to remove the trustee; to change the allocation among the children; to add grandchildren and spouses of heirs and charities as beneficiaries; to change the manner of distribution to the heirs. Under California law if all of the beneficiaries and the grantors agree, they can amend an irrevocable trust without having to go to court. There are also other ways to change an irrevocable trust, e.g., decanting to a new trust with better provisions. The trust can start off as a grantor (disregarded) trust for income tax purposes and it can "flip" or "toggle" to a complex trust and, perhaps, flip back again. So, the goal of this presentation is to make people aware that there are ways to make parents comfortable with irrevocable trusts, without which planning would be difficult, if not impossible.
14 05-17 the most common flaws in estate planningBruce Givner
The most common flaws in estate planning including the failure to get started, the failure to maintain fresh documents, the failures in many documents, failures in asset transfers, failure to consider family issues, and failures through overplanning and underplanning.
An overview of the entire state administrative process. Learn about when you can settle during the process, some great publications to read up on, how the audit wraps up, settlement, and what to do if you don't like the audit result.
For more information, please visit us at www.givnerkaye.com
Everything You Always Wanted To Know About Family Trusts But Were Afraid To AskBruce Givner
Family Trusts. Living Trusts. Inter Vivos Trusts. Revocable Trusts. Synonyms for trusts that are "Will substitutes." They help avoid probate and the need for a conservatorship. They help reduce the fees, including trustee and attorney fees, and delays of probate. Most of the documents are boilerplate, but why? What's wrong with using LegalZoom and other document preparation software? Must you file an IRS Form 1041 for a family trust? Must the living trust get its own EIN? What is a subtrust? What is an administrative trust? What is a grantor? A protector? A complex trust? How is competence determined? Are "no contest" clauses enforceable? Are illegitimate children "heirs"? Must a living trust be notarized? Must it be recorded? What is a "pourover" Will? What is a codicil? What is a holographic will? What is a personal property memorandum? What makes a power of attorney "durable"? What is a health care directive?
What is a "springing" power of attorney? What is a "pot" trust? What is a "specific" bequest? When should I use a corporate trustee? What's the difference between a fiduciary bond and fiduciary insurance? What is a trust certificate? What is a "blanket" assignment of assets? What is "per stirpes"? What is the rule against perpetuities?
California and federal forms; does it make sense to use non-California entities?; asset protection benefits; 3 different types of asset protection; problems with LLCs; gross receipts tax; best states for LLCs; the best structure; the rollout LLC; FLPs using LLCs; limited partnerships instead of LLCs; LLCs for tax-exempt entities;
Relief from Joint & Several Liability: Innocent Spouse Reliefgppcpa
Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. In filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce.Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability.
What information would your trustee or executor need and/or want to know if you died suddenly? Where is the information about your assets, debts, estate planning documents, relatives, retirement benefits, insurance policies? This checklist is designed to get you to put all of that information in one place, and to update it regularly.
15 06-18 Top 10 Tax Preparer And Other Tax Penalties - Not Going To Jail But ...Bruce Givner
What is the definition of a tax return preparer? What is the accuracy-related penalty? What are the primary other penalties? What is IRC Section 6694 (the preparer penalty)? How is it coordinated with the accuracy-related penalty? What are the easiest crimes to commit, e.g. obstruction of justice. What good can an opinion by a tax lawyer do for you?
15 07-24 Puerto Rico Income Tax IncentivesBruce Givner
Instead of expatriating, it is better to consider retaining your U.S. citizenship and becoming a resident of Puerto Rico. You sign a 20 year contract with the government. As a result, as an individual, you can pay zero federal and state tax on local interest, dividends and capital gains. The incentives for business are also phenomenal: a 4% rate with profits paid to owners tax free. A business must have 3 employees of which husband and wife can count as two.
In 1989 Alaska was the first state to allow a domestic asset protection trust. In that same year Nevada and Delaware also changed their laws to allow DAPTs (also called self-settled spendthrift trusts). The question was - for 30 years - if a person in California set up a DAPT in Nevada - could a judgment creditor in California take his judgment to Nevada and have the Nevada court enforce the judgment against the California debtor's asset protection trust. Some lawyers argued "yes," citing Art. IV, Section 1 of the U.S. Constitution, the "full faith and credit clause." Other lawyers argued "No, it would be against Nevada's public policy." Finally, in June, 2019, the South Dakota Supreme Court held that it would give "full faith and credit to the California family law court order. However, it would not give full faith and credit to the enforcement against a South Dakota trust. Will this case make it to the U.S. Supreme Court? What about the on-going divorce of Ed and Marie Borsarge? The Cameron case did not involve an asset protection trust. But certainly South Dakota, Nevada and the other states will rule the same way in a case involving an asset protection trust.
Family Limited Partnerships Update - Diagrams and Bullet Points - February 6,...Bruce Givner
Normal FLP structure for estate tax planning; modifying it to amplify the extent to which it can help add a hurdle between valuable assets and some future (not currently in existence) creditor if properly aged (4 - 7 years before there is a problem) and if it has a business purpose; important points in the event of an estate tax audit, e.g., separate counsel for the children's trust; problem of timing of the funding of the assets to the FLP versus timing of the gift of LP interests; problem of the change of California's LLC act effective 1/1/14; use of FLPs with captive insurance companies, pensions, life insurance and as an alternative to an ILIT.
How Parents Keep Control Both During Their Lifetimes And After They Are DeadBruce Givner
Irrevocable trusts are required if you want to engage in estate tax planning, asset protection planning (creditor planning) and even in a great deal of income tax (including capital gains tax) planning. However, parents are not thrilled at the idea of having to give away assets to a trust that they cannot revoke!! Do you mean that they can't change it? What if they change their minds about their children? About the trustee? Happily, there are many ways to make the parents comfortable that even though the trust itself is unable to be revoked, it is flexible. The parents, of course, pick as the initial trustee the person they trust to do whatever he or she is told without question but simply out of loyalty. More importantly, the parents can - at any time, without a reason - remove the trustee and name a new one (as long as the new one is not "related or subordinate" as defined in IRC Section 672(c)). The parents can advise the trustee to drop the assets down into a single member LLC and appoint the parents as the non-managing members. The trust can have a protector who can be given the power to remove the trustee; to change the allocation among the children; to add grandchildren and spouses of heirs and charities as beneficiaries; to change the manner of distribution to the heirs. Under California law if all of the beneficiaries and the grantors agree, they can amend an irrevocable trust without having to go to court. There are also other ways to change an irrevocable trust, e.g., decanting to a new trust with better provisions. The trust can start off as a grantor (disregarded) trust for income tax purposes and it can "flip" or "toggle" to a complex trust and, perhaps, flip back again. So, the goal of this presentation is to make people aware that there are ways to make parents comfortable with irrevocable trusts, without which planning would be difficult, if not impossible.
14 05-17 the most common flaws in estate planningBruce Givner
The most common flaws in estate planning including the failure to get started, the failure to maintain fresh documents, the failures in many documents, failures in asset transfers, failure to consider family issues, and failures through overplanning and underplanning.
An overview of the entire state administrative process. Learn about when you can settle during the process, some great publications to read up on, how the audit wraps up, settlement, and what to do if you don't like the audit result.
For more information, please visit us at www.givnerkaye.com
Everything You Always Wanted To Know About Family Trusts But Were Afraid To AskBruce Givner
Family Trusts. Living Trusts. Inter Vivos Trusts. Revocable Trusts. Synonyms for trusts that are "Will substitutes." They help avoid probate and the need for a conservatorship. They help reduce the fees, including trustee and attorney fees, and delays of probate. Most of the documents are boilerplate, but why? What's wrong with using LegalZoom and other document preparation software? Must you file an IRS Form 1041 for a family trust? Must the living trust get its own EIN? What is a subtrust? What is an administrative trust? What is a grantor? A protector? A complex trust? How is competence determined? Are "no contest" clauses enforceable? Are illegitimate children "heirs"? Must a living trust be notarized? Must it be recorded? What is a "pourover" Will? What is a codicil? What is a holographic will? What is a personal property memorandum? What makes a power of attorney "durable"? What is a health care directive?
What is a "springing" power of attorney? What is a "pot" trust? What is a "specific" bequest? When should I use a corporate trustee? What's the difference between a fiduciary bond and fiduciary insurance? What is a trust certificate? What is a "blanket" assignment of assets? What is "per stirpes"? What is the rule against perpetuities?
California and federal forms; does it make sense to use non-California entities?; asset protection benefits; 3 different types of asset protection; problems with LLCs; gross receipts tax; best states for LLCs; the best structure; the rollout LLC; FLPs using LLCs; limited partnerships instead of LLCs; LLCs for tax-exempt entities;
Relief from Joint & Several Liability: Innocent Spouse Reliefgppcpa
Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. In filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce.Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability.
What information would your trustee or executor need and/or want to know if you died suddenly? Where is the information about your assets, debts, estate planning documents, relatives, retirement benefits, insurance policies? This checklist is designed to get you to put all of that information in one place, and to update it regularly.
15 06-18 Top 10 Tax Preparer And Other Tax Penalties - Not Going To Jail But ...Bruce Givner
What is the definition of a tax return preparer? What is the accuracy-related penalty? What are the primary other penalties? What is IRC Section 6694 (the preparer penalty)? How is it coordinated with the accuracy-related penalty? What are the easiest crimes to commit, e.g. obstruction of justice. What good can an opinion by a tax lawyer do for you?
Everything you ever wanted to know about trustees: What does it mean to be a trustee? What are your responsibilities and liabilities? What makes a good trustee?
For more information, please visit us at www.givnerkaye.com
14 12-18 Everything You Always Wanted To Know About Public Charities But Were...Bruce Givner
Tax deductible vs. tax exempt; charities vs. other tax-exempt entities such as trade associations; UBTI - unrelated business taxable income; Forms 990 and 990-T; self-dealing rules; Section 4940 and the 2% excise tax on investment income, 4941 and the taxes on self-dealing, 4942, 4943, 4944 and 4945; intermediate penalties and Section 4958; private foundations vs. public charities; private operating foundations; medical research organizations; types of public charities;
14 06-19 U.S. Treaties - How To Understand And Plan With ThemBruce Givner
IRS publications and forms; list of countries with which the U.S. has income and estate and gift tax treaties; reasons for both types of treaties; situs vs. status transfer tax treaties; German estate tax treaty as an example; treaties vs. the Internal Revenue Code; review of the basic provisions of income tax treaties, including tie-breakers, independent workers, directors, artists and athletes, students and teachers, interest, dividends, royalties, real property income and gains, Publication 901 table examples, double Irish structure.
INSTRUCTORADO UNIVERSITARIO EN MUSCULACION y PERSONAL TRAINER. Apunte de Fuerza.
Director Deportivo: SARDEN MATIAS ARIEL.
Director Academco: ANTONELLI SERGIO.
The Impact of the New Tax Law on Real Estate InvestmentCBIZ, Inc.
The bill introduced as the Tax Cuts and Jobs Act (TCJA) was signed into law by the President on December 22, 2017. It is the most far reaching tax change to affect the real estate sector since the Tax Reform Act of 1986. Generally speaking, real estate fared well under the new law.
The Impact of the New Tax Law on Real Estate InvestmentCBIZ, Inc.
Generally speaking, real estate fared well under the Tax Cuts and Jobs Act (TCJA). This document provides a recap of the key areas of real estate that were impacted by the new tax law. www.cbiz.com
This presentation includes an overview of tax changes from 2012 and what's new in 2013.
For more information about our tax services, visit www.cbiz.com
Section 199A of the Internal Revenue Code provides many taxpayers a deduction for qualified business income from a qualified trade or business operated directly or through a pass-through entity.
http://bit.ly/Harshwal
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
Students, digital devices and success - Andreas Schleicher - 27 May 2024..pptxEduSkills OECD
Andreas Schleicher presents at the OECD webinar ‘Digital devices in schools: detrimental distraction or secret to success?’ on 27 May 2024. The presentation was based on findings from PISA 2022 results and the webinar helped launch the PISA in Focus ‘Managing screen time: How to protect and equip students against distraction’ https://www.oecd-ilibrary.org/education/managing-screen-time_7c225af4-en and the OECD Education Policy Perspective ‘Students, digital devices and success’ can be found here - https://oe.cd/il/5yV
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Planning to Avoid the New Medicare Tax & Other 2013 Tax Increases
1. LAW OFFICES
GIVNER & KAYE
A PROFESSIONAL CORPORATION
SUITE 445
12100 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90025
www.GivnerKaye.com
www.MajorTaxProblems.com
BRUCE GIVNER
(bruce@GivnerKaye.com)
OWEN D. KAYE
(owen@GivnerKaye.com)
KATHLEEN GIVNER
(kathy@GivnerKaye.com)
NEDA BARKHORDAR
(neda@GivnerKaye.com)
PHONE (310) 207-8008
(818) 785-7579
FAX (310) 207-8708
(818) 785-3027
March 7, 2013
Planning To Avoid The New Medicare Tax
And Other New 2013 Tax Increases
1. Background. 1
1.1. Employment Income.
OASDI is 6.2% on wages paid up to an annual cap: $113,700 per employee in 2013.
HI (Medicare) is 1.45% - no cap.
So 12.4% up to the cap for OASDI and 2.9% on all wages.
Salary of $113,700 it’s $14,098.80 + $3,297.30 = $17,396.10 (15.3%).
Salary of $250,000 it’s $14,098.80 + $7,250 = $21,348.80 (8.54%).
Salary of $450,000 it’s $14,098.80 + $13,050 = $27,148.80 (6.03%).
Salary of $1,000,000 it’s $14,098.80 + $29,000 = $43,098.80 (4.3%)
1.2. Net Earnings From Self-Employment Income.
Same as above. But 1.45% is deductible.
1.3. 2013 Increase.
FICA and SECA increase by 0.9% for earnings about $200,000 for single taxpayers
and $250,000 for married taxpayers.
1.4. Obamacare.
Modeled after the FICA and SECA regimes, but applied to unearned income.
Though we’ve heard “net investment income,” it’s nearly all other income for high
income taxpayers.
1
Heavily adapted from, and all praise to, Holthouse and Ritchie, “Inoculating Real Estate Against The
Obamacare Tax,” 54 Tax Management Memorandum 79 (March 11, 2013).
2. LAW OFFICES
GIVNER & KAYE
A PROFESSIONAL CORPORATION
Planning To Avoid The New Medicare Tax And Other
2013 Tax Increases
March 7, 2013
Page 2 of 14
Limited good news:
Real estate professional exception to passive loss rules.2
like kind exchanges (§1031)
$250,000 on sale of residence (§121)
retirement plan distributions
tax-exempt bonds
cash value life insurance
oil & gas
1.5. Other Tax Increases.
Marginal bracket of 39.6% for $400,000 - $450,000.
Phase-out itemized deductions and personal exemptions. 3% of AGI above $300,000.
California 12.3% over $500,000 and 13.3% over $1,000,000.
2. New 3.8% Law.
2
IRC §469(c)(7). (7) Special rules for taxpayers in real property business.
(A) In general. If this paragraph applies to any taxpayer for a taxable year— (i) ¶(2) [“Passive activity
includes any rental activity”] shall not apply to any rental real estate activity of the taxpayer for the taxable year,
and (ii) this section shall be applied as if each interest of the taxpayer in rental RE were a separate activity.
Despite clause (ii), a taxpayer may elect to treat all interests in rental real estate as one activity. Nothing in the
preceding provisions of this subparagraph shall be construed as affecting the determination of whether the
taxpayer materially participates with respect to any interest in a limited partnership as a limited partner.
(B) Taxpayers to whom paragraph applies. This paragraph shall apply to a taxpayer for a taxable year if—
(i) more than 1/2 of the personal services performed in trades or businesses by the taxpayer
during such taxable year are performed in real property trades or businesses in which the taxpayer materially
participates, and
(ii) such taxpayer performs more than 750 hours of services during the taxable year in real
property trades or businesses in which the taxpayer materially participates.
In the case of a joint return, the requirements of the preceding sentence are satisfied if and only if either
spouse separately satisfies such requirements. For purposes of the preceding sentence, activities in which a
spouse materially participates shall be determined under subsection (h).
(C) Real property trade or business. For purposes of this paragraph, “real property trade or business”
means any real property development, redevelopment, construction, reconstruction, acquisition, conversion,
rental, operation, management, leasing, or brokerage trade or business.
(D) Special rules for subparagraph (b).
(i) Closely held C Corporations. In the case of a closely held C corporation, the requirements of
subparagraph (B) shall be treated as met for any taxable year if more than 50% of the gross receipts for the
taxable year are derived from real property trades or businesses in which the corporation materially participates.
(ii) Personal services as an employee. For purposes of subparagraph (B), personal services
performed as an employee shall not be treated as performed in real property trades or businesses. The
preceding sentence shall not apply if such employee is a 5% owner (as defined in §416(i)(B))) in the employer.
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2.1. Limited Exceptions.
NRAs and tax-exempt charitable trusts.3
2.2. General Rule.
When MAGI4
exceeds threshold, tax is on lesser of NII or excess of MAGI5
over
applicable threshold amount (“ATA”).
Threshold: $200,000 for single taxpayers, $250,000 for married; $11,950 for trusts and
estates.
Compare: new maximum tax rates are $400,000 for singles, $450,000 married.
Example:6
Joe, single:
$150,000 salary
$ 60,000 income from passive business
$ 25,000 interest
$235,000 total
Tax applies to the lesser of NII ($85,000) or AGI – ATA ($235,000 - $200,000 =
$35,000). So $35,000 X 3.8% = $1,330.
2.3. Implications.
Compliance costs might exceed the tax for those marginally over the thresholds.
Low trust threshold encourages trustees to distribute to lower income beneficiaries.
Since 3.8% not deductible, earnings above $113,700 are better under SE than as NII.
No impact on AMT.
Must consider for purposes of estimated tax.
3
CRTs addressed by proposed regs, not the statute. Only NII received by the CRT (not the beneficiary) after
2012 is subject to the tax. WIFO ordering rule treats NII as the first (worst)!!!
4
Undistributed NII for trusts and estates.
5
For most taxpayers it is Form 1040, page 1, line 37.
6
Examples throughout are adapted from Keebler, “Observations on the 3.8% Medicare Contribution Tax
Proposed Regulations,” February, 2013, Taxes – Tax Magazine, page 5.
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2.4. NII.
2.4.1. In General.
Traditional investment income, e.g., dividends, interest, investment asset gains, plus
other unearned income, e.g., annuities, royalties, rents, passive activity income and
net gains, and financial instrument and commodity income and net gains.
Not qualified plan distributions.
2.4.2. §1411(c)(1)(A)(i).
Gross income from dividends, interest, annuities, rents and royalties.
2.4.3. §1411(c)(1)(A)(ii).
Other gross income from passive activity or activity of trading financial instruments and
commodities. Gross income from a trade or business in which the taxpayer does not
materially participate.
2.4.4. §1411(c)(1)(A)(iii).
Net gains from disposition of property, other than gains derived in a trade or business
in which the taxpayer materially participates that is not the business of trading financial
instruments. Includes interests in pass-through entities.
2.4.4. §1411(c)(1)(B).
Deductions allocable to items included in the 3 categories above.
2.4.5. Trade Or Business.
Not defined in the proposed regulations. Contrast §469, passive loss rules.
Determining whether a trade or business is passive is at the owner level.
Determining whether a trade or business is financial instruments is at entity level.
2.4.6. Exceptions.
Gain from the sale of the pass-through interest related to appreciation of the
underlying trade or business assets (if not passive or financial instruments or
commodities and if no §338(h)(10) election).
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2.4.7. Operation.
Each activity is divided: (i) investment gross income; (ii) other gross income from
passive activities, including financial trading; (iii) net gains and losses from disposition;
and (iv) deductions.
If disposition result is net loss, the activity is ignored.
Deductions for a year cannot exceed the amount of NII for the tax year. Any
deductions in excess of NII are considered in determining NII for another tax year to
the extent allowed under regular income tax rules.
Example: In Year 1 Joe, single, has a $40,000 capital loss on the sale of P stock and
a $10,000 capital gain on the sale of Q stock resulting in a net capital loss of $30,000.
Both are C corporations. Joe also has $300,000 of wages and $5,000 of interest.
For income tax purposes Joe may use $3,000 of the net capital loss against
other income and $27,000 is a capital loss carryover. For NII, the $10,000 of
gain is eliminated by the loss, but he may not reduce NII by the $3,000 of
excess losses over capital gain.
In Year 2 Joe has a $30,000 capital gain on the sale of Y stock, a C
corporation. For income tax purposes he may reduce the $30,000 gain by the
Year 1 $27,000 capital loss carryover. For NII purposes his $30,000 gain may
be reduced by the $27,000 capital loss carryover.7
Any deductions subject to the 2% floor on miscellaneous itemized deductions or the
overall limit on itemized deductions allowed in determining NII only to the extent
deductible for regular income tax purposes after application of §§ 67 and 68.8
If overall net investment loss, the tax does not apply, but no carryover. NOLs are not
considered in determining NII for any tax year.9
Suspended passive loss carryovers freed on disposition of passive activity? Unsure.
One-time regrouping of activities done under §469.10
Limited to 1st
year beginning
7
Prop. Reg. §1.1411-4(h), Example 1.
8
Prop. Reg. §1.1411-4(f)(3)(ii).
9
Prop. Reg. §1.1411-4(f)(1)(ii).
10
Prop. Reg. §1.469.-11(b)(3)(iv). “(A) In general. If an individual, estate, or trust has net investment income
(as defined in §1.1411-4) and such individual's (as defined in §1.1411-2(a)) modified adjusted gross income
(as defined in § 1.1411-2(c)) exceeds the applicable threshold in §1.1411-2(d) or such estate's or trust's (as
defined in §1.1411-3(a)(1)(i)) adjusted gross income exceeds the amount described in section 1411(a)(2)(B)(ii)
and §1.1411-3(a)(1)(ii)(B)(2), such individual, estate, or trust may, in the first taxable year beginning after
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after 12/31/2013.
2.5. MAGI.
AGI increased by foreign earned income and housing costs excluded under §911(a)
and decreased by related deductions.
Not decreased by itemized deductions under §212. (Contrast NII which is reduced by
expenses related to income items).
Includes qualified plan distributions. So taxpayer with large pension distribution or
Roth IRA conversion could be subjected to the tax.
3. Real Estate Under The 3.8% Tax.
3.1. In General.
3.1.1. Where New Law Does Not Apply.
Real estate as an active (non-passive) trade or business, income and net gains ≠ NII.
However, they will probably be subject to 3.8% partly-deductible SECA.
3.1.2. Where New Law Applies.
Net Income From:
Passive (no material participation) rental operations (direct or pass-through.
Passive non-rental operations (direct or through a pass-through).
Net Taxable Gains From:
Passive rental (or other passive real estate) properties
December 31, 2013, in which section 1411 would apply to such taxpayer, regroup its activities without regard
to the manner in which the activities were grouped in the preceding taxable year. For this purpose, the
determination whether section 1411 would apply is made without regard to the effect of regrouping. A taxpayer
that is an individual, estate, or trust may regroup its activities for any taxable year that begins during 2013, if
section 1411 would apply to such taxpayer for such year. A taxpayer may regroup activities only once pursuant
to this paragraph (b)(3)(iv), and a regrouping made pursuant to this paragraph will apply to the taxable year for
which the regrouping is done and all subsequent years.”
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Unproductive real estate.
Pass-through entity generating above types of income.
Personal residence.
3.2. Material Participation.
Statute: regular, continuous and substantial. Regulations:
1. More than 500 hours during the year.
2. Substantially all of the participation in the activity of everyone during the year.
3. More than 100 hours which is not less than anyone else’s.
4. Significant participation activity and activity in all exceeds 500 hours.
5. Material participation for any 5 of preceding 10 years.
6. Personal service activity and material participation for any 3 taxable years.
7. Facts and circumstances: regular, continuous and substantial.
If a limited partner, only test 1, 5 or 6 unless also a GP.
Spouse’s hours are attributed to the taxpayer.
Hours must be performed while an owner.
No pro ration for short taxable year.
Work normally performed by an owner is not counted.
Work as an investor is not counted
Contemporaneous log, not required, is helpful, especially if close to the standard.
Trust can only meet the standards through trustee’s activity.
Each activity must be tested separately, though taxpayers can generally determine.
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Rental activity may not be grouped with other TorB activities unless one is
insubstantial and ownership is proportionate
Example: Joe acquired businesses X, Y and Z two years ago. All three have several
full-time employees. Joe participates 400 hours in X, 75 in Y and 75 in Z. Were the
activities treated separately, Joe would not materially participate in any of them, and all
income would be subject to the 3.8% Medicare tax. If Joe can regroup them into one
activity, he will have 550 hours and qualify under Test 1.
Unrelated real and personal property rental is not permitted.
Example: Joe owns a building with a yogurt shop on the first floor and a rental unit on
the second floor. Joe groups the two activities together and materially participates.
This converts the net rental income to non-passive but it is still treated as NII.11
Groupings made at the entity level.
One-time regrouping. Permanent. Must be disclosed. Rev. Proc. 2010-13.
3.3. Rental Activities.
Real property rental is “per se passive.” §469(c)(2). Therefore NII under §1411.
Presumption overcome for RE professionals. §469(c)(7): 750 hours if it is a TorB.
Is ownership of a single rental property requiring minimal activity enough? Mud.
Once material participation is proven, the TorB question may be satisfied.
Distinguish: grouping used to determine the boundaries of an activity vs. aggregation
of all interests in rental RE activities to determine material participation.
Danger: if an activity is as an LP, aggregation may cause the entire combined activity
to be treated as an LP interest, meaning only tests 1, 5 and 6 are available.
Danger: treating all rental RE as a single activity will delay the deduction of
suspended losses, where a single property is disposed of before others.
Surprise: pre-§1411, RE pros with positive taxable income may not have used or
11
Preamble to the proposed regulations at §6A(i)(b)(4).
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cared about the RE professional exception. (Those with losses cared.) Now it is
mandatory. Given the new tax cost of NII, more with positive income will care.
Spouses: either can meet. Contrast 7 material participation tests where spouses’
hours are pooled.
Investor hours do not count.
Employee hours count only if more than 5% owner.
Important: does qualifying as a RE professional and achieving material participation
status make the rental properties a TorB not subject to §1411’s 3.8%? Hopefully
“yes.” The activities must be a TorB under §162. If successful, since excluded from
SECA tax under §1402(a)(1), the rental income avoids the 3.8% HI tax completely.
3.4. Gains From Sale Of Rental Properties Or Properties Used In Other Passive
Real Estate Operations.
Net gain from disposition of TorB real property is not included in NII.
Like kind exchanges defer the NII tax.
Ordinary income recapture under §§1245 and 1250 is included in NII.
Mitigate §1411 tax by foregoing bonus deprecation or electing to capitalize expenses.
3.5. Gains From Sale Of Unproductive Real Estate.
Only net gains from the disposition of property held in an active TorB avoids NII tax.
So raw land sale falls under NII tax.
3.6. Gains From Sale Of Interest In Pass-Through Entity.
Look through to the underlying properties held by the entity.
3.7. Gains From Sale Of Personal Residence.
Same as unproductive real estate.
But §121 $250,000 available.
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3.8. Gross Rents From Non-Trade or Business Activities.
§1411(c)(1)(A)(i) includes interest, dividends, annuities, royalties and rents.
Reg. §1.469-1T(e)(3)(ii): “(ii) Exceptions. For purposes of this ¶(e)(3), an activity
involving the use of tangible property is not a rental activity for a taxable year if for
such taxable year—
(A) The average period of customer use for such property is seven days or less;
(B) The average period of customer use for such property is 30 days or less, and
significant personal services (within the meaning of ¶(e)(3)(iv) of this section) are
provided by or on behalf of the owner of the property in connection with making the
property available for use by customers;
(C) Extraordinary personal services (within the meaning of ¶(e)(3)(v) of this section)
are provided by or on behalf of the owner of the property in connection with making the
property available for use by customers (without regard to the average period of
customer use);
(D) The rental of such property is treated as incidental to a nonrental activity of the
taxpayer under ¶(e)(3)(vi) of this section;
(E) The taxpayer customarily makes the property available during defined business
hours for nonexclusive use by various customers; or
(F) The provision of the property for use in an activity conducted by a partnership,
S corporation, or joint venture in which the taxpayer owns an interest is not a rental
activity under ¶(e)(3)(vii) of this section.”
One of these may meet material participation yet not be a trade or business.
4. Planning Strategies For The 3.8%.
4.1. Deferral Strategies.
2012 capital gains tax rate: 15% Federal + 9.3% State = 24.3%.
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2012 capital gains tax rate: 20% + 3.8% + 13.3% = 37.1% (153% of 2012).
§1031 like-kind exchanges, including “drop & swap” (but see Rev. Proc. 2002-22).
Installment sales.
Bonus, accelerated and component depreciation.
Cash-out refinancing.
4.2. Timing Strategies.
Better to accelerate income and defer deductions due to potential rate increases?
Do not prepay mortgage and real estate taxes.
Opt out of bonus depreciation.
Elect out of installment sale treatment.
Negotiate leases with prepaid rents.
Forego carryback of NOLs.
Manage income when near the §1411 $200,000/$250,000 floor.
AMT projections so benefit of deductions not lost.
4.3. Splitting Income.
Distributions from non-grantor trusts above $11,950 threshold. 65 day rule.
Are non-grantor trusts now more attractive than grantor trusts in some situations?
Toggling grantor trusts to become non-grantor trusts? Probate Code §15404(a)
consents if no ability to make the change in the trust instrument itself.
Gifts and FLPs to spread income.
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4.4. Working With Passive Loss Rules.
Professional real estate exception to passive loss rules is focus of §1411 planning.
Make the §469(c)(7) aggregation election to make meeting the material participation
standard easier. Downside: disposition of one will not free up suspended passive
losses under §469(g).
Hours as employee don’t count unless 5% owner. So if management company is
owned by Dad, and son owns interest in the SPEs managed, son will fail the test.
4.4. Allocating Expenses.
Expenses should be targeted to NII, including paying the state income tax in an earlier
year.
4.5. Coordinating With Self-Employment Tax.
NESE is income from a TorB plus from a partnership.
NESE excludes rental income, guaranteed payments from rental activity and LP share.
“S” income is not subject to SECA.
Better to have income subject to FICA/SECA since 1.45% is deductible. NESE
includes guaranteed payments for services or use of capital in TorB.
5. Conclusion On The 3.8%.
Table 1 From Holthouse & Ritchie Article, see Footnote 1
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Comparison SE Tax to NII Tax
Held Outright Held in S Corp
Held as Gen Pshp
Int
Held as Ltd Pshp
Int
Subj. to
SE tax
Subj. to
NII tax
Subj. to
SE tax
Subj. to
NII tax
Subj. to
SE tax
Subj. to
NII tax
Subj. to
SE tax
Subj. to
NII tax
Non-Rental, MP, TB Yes No No No Yes No No No
Non-Rental, no MP,
TB
Yes No No Yes Yes No No Yes
Non-Rental, MP, no
TB
No Yes No Yes No Yes No Yes
Non-Rental, no MP,
no TB
No Yes No Yes No Yes No Yes
Non-Rental, Guar
Pymt for services
Yes No Yes No
Non-Rental, Guar
Pymt for capital
Yes No No Yes
Rental, QREP, MP,
TB
No No No No No No No No
Rental, QREP, no
MP, TB
No Yes No Yes No Yes No Yes
Rental, QREP, MP,
no TB
No Yes No Yes No Yes No Yes
Rental, QREP, no
MP, no TB
No Yes No Yes No Yes No Yes
Rental, no QREP,
MP, TB
No Yes No Yes No Yes No Yes
Rental, no QREP,
no MP, TB
No Yes No Yes No Yes No Yes
Rental, no QREP,
MP, no TB
No Yes No Yes No Yes No Yes
Rental, no QREP,
no MP, no TB
No Yes No Yes No Yes No Yes
Rental, Guar Pymt,
services
No Yes No Yes *
Rental, Guar Pymt,
capital
No Yes No Yes
Legend:
MP = Material Participation
TB = §162 Trade or business
QREP = Qualified Real Estate Professional
*
Unless QREP, MP, TB,
“Sweet spot,” no SE tax, no NII tax
Income s.t. SE tax, not NII tax
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6. Planning For The 39.6% Marginal Tax Bracket.
Few income tax planning techniques left compared to twenty years ago.
Economically neutral structures limited to (i) retirement plans; (ii) wealth captives; (iii)
charitable planning, including CharLLCs; (iv) cash value life insurance and annuities;
and (v) expatriation.
Tax favored investments such as (i) real estate; (ii) oil & gas; (iii) farming; and (iv)
munis.
7. Planning For The Higher California Brackets.
All of the above.
Fleeing to no-tax states: NV, TX, FL, AK, SD, Washington and Wyoming.
Low-tax states: Tennessee (6% but only on dividends and interest); Pennsylvania
(3.07%); Indiana (3.4%); Colorado (4.63%); Arizona (4.54%).
DNGTs, taking advantage of California’s rule on tax trusts (contingent beneficiaries do
not count).