NEW YORK (Reuters) – Philanthropist Brooke Astor. The Grateful Dead’s Jerry Garcia. There are a few celebrities who, in death, at least in certain circles, have become as known for the litigation over their estates as for how they lived their lives. While the dollars are mind-boggling in these cases, anyone thinking about wealth transfer faces the same issues: dysfunctional families, potentially unequal positions in the family business, perhaps multiple marriages with kids from each.
We spoke with Russell Fishkind, an estate attorney and a partner in the East Coast law firm of Saul Ewing and author of “Probate Wars of the Rich and Famous: An Insider’s Guide to Estate Planning and Probate Litigation,” about what regular folks can learn from these high-profile estate battles.
NEW YORK (Reuters) – There’s little time left in the year for tax planning. While most year-end tax planning stories focus on employees with tips about spending down flexible spending accounts and the like, if you’re self-employed or a small-business owner, you’ve got more options for tax planning than those who receive W-2s from their employers.
But there’s also more reason to be careful and to keep good records, as Schedule C filers have come under increasing scrutiny by the Internal Revenue Service.
NEW YORK (Reuters) – It’s painful to admit that you’ve lost money on an investment. But even worse is leaving those losers in your portfolio, and ending up paying capital-gains taxes because the only investments you’ve sold this year were the winners.
Tax rules allow you to get a benefit from taking losses, and this year you may have gains you need to offset. While tax-loss harvesting is best done throughout the year, most investors think about it at year end. For 2011, you’ve got just a little time left to get it done.
NEW YORK (Reuters) – The Internal Revenue Service’s crackdown on overseas tax cheats is having an unintended consequence on American expats. It’s prompting many of them to pay penalties for failure to file paperwork that may be drastically out of proportion to the actual amount of taxes owed.
After Reuters ran an article on November 9 (link.reuters.com/cyw45s) about the latest developments in the IRS’s search for unpaid taxes on foreign accounts, many American expats and dual citizens contacted us with tales of woe. In phone conversations and emails with more than a dozen people during the last three weeks, we heard stories of stress, fear and attempts to do the right thing before the latest voluntary disclosure window closed in September.
NEW YORK (Reuters) – It’s not just holiday cards and sales flyers cluttering your mailbox: There’s a good chance you’ve also been getting lots of unfamiliar paperwork about your investments. New tax rules require your broker and mutual funds to keep track of the cost of your investments for tax purposes (termed the cost basis), and they are writing now to ask you to choose your accounting method.
Ignore those new forms at your own peril, even if you’d rather ignore all the legalese. There is real money to be saved by choosing the right accounting method, and if you don’t make a choice, your broker or fund company will choose a method for you. It may not be the best one.
NEW YORK, Nov 16 (Reuters) – In a volatile year for the
stock market like this one, it’s worth paying attention to
mutual funds’ potential tax situations before they make
distributions. If you buy into a fund with a hefty distribution
slated, you’ll end up paying the price. Conversely, if you
invest in a fund with a lot of capital losses built up, you’ve
just found yourself a nice tax haven.
Investors often don’t think much about distributions, but
at this time of year they should. By law, all mutual funds must
distribute any taxable gains realized during the year from
selling appreciated stocks. Most do so in December, before the
tax year ends.
NEW YORK, Nov 9 (Reuters) – For those who have been hiding
assets overseas from U.S. tax authorities, knowingly or not,
the news that Credit Suisse will turn over names and account
details of certain U.S. clients to the Internal Revenue Service
could be the beginning of the end.
The IRS, aggressively seeking to bring taxpayers with
offshore assets and income back into the tax system, offered
several rounds of voluntary disclosure windows to induce
taxpayers to confess. The last window closed on September 9.
When making tax policy, there’s a choice between carrots or sticks: Does the government give taxpayers credits or deductions for doing the right thing (buying their homes, giving money to charity, not emitting greenhouse cases) or penalize them for doing the wrong thing?
Brian Galle, who is on leave as an assistant professor at Boston College Law School and currently a fellow at the Urban Institute in Washington, DC, has been analyzing those choices, and come to a surprising conclusion: Expenditures may be politically expedient, but penalties would often be preferable for fiscal policy.
If your financial life spans multiple countries and you’ve not been paying close attention to your tax issues, be forewarned: This Friday is the deadline for the Internal Revenue Service’s latest offshore tax reporting voluntary disclosure program.
It’s one of those deadlines that most people pay little attention to, despite how much it’s been publicized. It’s the second in a series of IRS efforts — some 15,000 came forward for the previous initiative in 2009 — to bring offshore assets and income into the tax system through a voluntary disclosure program that let taxpayers avoid an array of civil and even criminal penalties (including potential jail time) for foreign income and account violations. Taxpayers who choose the program still face penalties, which may be hefty, but they are far less severe than those the IRS can impose if it uncovers your tax transgressions.
When Ronna Wisbrod, a real estate broker and personal organizer, returned to the Chicago area last year, she needed to figure out new health insurance. Now 57, she knew she had to have insurance, but as she set up her own business, Organization by Ronna, she also wanted to keep costs down.
“I’m at a rebuilding stage and in the process of rebuilding my budget, [which] is very tight,” Wisbrod says.