Archives: Income Tax

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IRS Simplifies Rules for Correcting Failed Rollover

On August 24, 2016 the IRS published Revenue Procedure 2016-47, which simplifies the steps for correcting a missed rollover from a qualified plan or IRA to another qualified plan or IRA. Amounts distributed from a qualified plan or IRA will be taxable unless they are rolled over into another plan or IRA within 60-days of … Continue Reading

The Ohio Supreme Court Places Limitations on the Ohio Bright Line Income Tax Residency Presumption

On July 8, 2015, the Ohio Supreme Court found that Ohio nonresidents may not claim the benefit of the Ohio “bright line” presumption of nonresidency for income tax purposes if the taxpayer attests to having a domicile outside Ohio on the required Affidavit of Non-Ohio Domicile and the tax commissioner is in possession of information … Continue Reading

Income Tax Reporting for Decanting

Decanting refers to the distribution of trust property of one trust (the “first trust”) to another trust (the “second trust”).  Over the past several years, the number of states specifically authorizing decanting by statute has grown rapidly.  As of March 2014, at least twenty-two states have passed or proposed a state decanting statute. Notwithstanding this … Continue Reading

IRS Issues Warnings about Email and Telephone Tax Scams

As the 2014 tax filing season progresses the Internal Revenue Service has issued warnings to taxpayers about convincing fraudulent email messages and telephone calls seeking payments or personal information that will enable the scammer to directly or indirectly steal from the victim.  All taxpayers should keep in mind that the Internal Revenue Service never initiates … Continue Reading


Because trusts are subject to the 3.8% Net Investment Income Tax at a very low income level, $12,150 for 2014, trustees of trusts owning interests in operating entities have been considering ways to meet the material participation requirements to avoid this tax.  As discussed in a prior post, differing points of view have arisen regarding … Continue Reading

Will Camp Tax Plan Impact Charitable Giving and Tax-exempt Organizations?

In late February 2014, House Ways and Means Committee Chairman Dave Camp (R-MI) released a nearly 1,000 page discussion draft addressing tax reform.  Chairman Camp’s proposal includes changes to numerous sections of the Internal Revenue Code, including changes with respect to the taxation of individuals, capital gains and businesses.  The discussion draft also includes changes … Continue Reading

A Disconcerting Proposal from the Senate: Proposed Repeal of Section 1031

Last November, Senate Finance Committee Chairman, Max Baucus, released the third package in a series of “Staff Discussion Drafts” proposing various changes to reform the Internal Revenue Code.  Of course, it is likely that any major changes to the Code will be shelved until the inevitable discussion begins regarding the difficult process to address federal … Continue Reading

ACTEC Wealth Advisor App Offers Powerful Planning Tool for Wealth Management Professionals

The American College of Trust and Estate Counsel (ACTEC) is a national association of leading trust and estate attorneys.  ACTEC contributes to the field of trusts and estates law through scholarship, teaching, and bar leadership activities.  BakerHostetler’s private wealth planning attorneys have a long and active history with ACTEC.  Recently, BakerHostetler’s participation helped with the … Continue Reading

CRESCENT HOLDINGS: An Issue of First Impression for Partners with Capital Interests

On December 2, 2013, the United States Tax Court issued an opinion in Crescent Holdings, LLC v. Commissioner, 141 T.C. No. 15.  This opinion affects individuals who receive a non-vested capital interest in a partnership.  In what it states was an issue of first impression, the Tax Court held that income of the partnership that … Continue Reading

IRS “Wealth Squad” – Something to Keep in Mind During Tax Season

The IRS Global High Wealth Industry (“GHWI”) (part of the IRS Large Business & International Division) is auditing individuals with tens of millions of assets or income who utilize complicated financial and estate plan structures.  GHWI was established by the IRS in late 2009, but now has a few years of service “under its belt”.  … Continue Reading

‘Tis the Season – For Year-End Charitable Giving

Most people make the bulk of their charitable contributions during the year-end holiday season.  This post summarizes some of the charitable giving ideas and opportunities, as well as some planning reminders, that donors may want to consider: Gifts of Appreciated Securities Many people have benefited this year from the surge in the investment markets.   Appreciated marketable … Continue Reading

May I Pay Your Taxes?: Colorado Enacts a New Grantor Reimbursement Statute

Grantor trusts are a powerful tool in estate planning in part because they facilitate depletion of the grantor’s estate by the grantor’s payment of income taxes attributable to the trust.  There may be circumstances, however, when the grantor is no longer in a position to bear some part or all of the trust’s tax burden, … Continue Reading