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Showing 3 posts from May 2014.
'Til Death Do Them Part: Creditor Rights
Settling the affairs of a deceased love one is never easy. When the decedent has outstanding debts to credit card companies, mortgage lenders, or other institutions, the process is further complicated. Generally, no one else is legally obligated to repay the debt of a person who has died, but there are exceptions to this rule. For instance, a co-signor on a loan may be liable for the debt under certain circumstances. More >
Trusts Can "Materially Participate" in Businesses
Estate planning attorneys and financial planners now have much-needed guidance about "material participation" and "personal services" as they relate to trusts. The Tax Court recently ruled that a trust materially participated in its rental real estate business and therefore could deduct the losses it incurred in conducting those activities as losses from non-passive activities. The court rejected the IRS's argument that "personal services" performed in real estate activities must be performed by an individual, not a trust. This ruling is especially important considering the introduction of the "Medicare Tax" which imposes a 3.8% surtax on net investment income (the definition of net investment income includes income derived from a trade or business that is a passive activity to the investor). More >
Resolving disagreements in a closely held business
Those managing closely held businesses are as prone to disagreements with each other as are those managing any other kind of business. However, a closely held business does present a unique series of challenges in that resolution of those disagreements can be difficult to resolve. More >
