Trust as IRA Beneficiary

Heirs lost the ability to benefit from many years of tax free buildup of IRA value because the beneficiary designation was too vague. The IRA owner wrote “as stated in will” for his IRA beneficiary, intending the money to go into a trust. Specifically identifying the trust would have achieved the desired result.

Taxpayer Can Claim Home Tax Deductions Even if Not on Title or Loan

The tax court in the Njenge case recently validated something I’ve been telling clients for years: a taxpayer can deduct personal residence mortgage interest and property taxes even though loan and/or title to the home are in someone else’s name, under the right circumstances. The person who lived in the home, made the payments, and bore all benefits and burdens of ownership is treated as the “equitable owner” and can deduct the property tax and interest payments.

IRA Rollover 60-Day Period Waivers

IRS has issued Private Letter Rulings to allows IRA rollovers even though the 60-day period expired. The rulings covered cases of mistakes by financial institutions and financial advisors, and mental condition of taxpayer. PLR 200904030, PLR 200904027, PLR 200904028, PLR 200904032, PLR 200904034.

Late S-Corporation Election Allowed

IRS has again issued a Private Letter Ruling allowing a retroactive late S-corporation election when a corporation and its shareholders have reported income as if an S-Corporation election has been timely made, where reasonable cause was shown for failure to timely make the election. PLR 200904018.

Splitting Trust into 4 Separate Trusts Ruled Non-Taxable

In 3 Private Letter Rulings the IRS has recently ruled that splitting a trust into 4 separate trusts won't cause taxable gain or loss to any beneficiary, trust, or severed trust. The rulings addressed testamentary trusts and an irrevocable inter vivos trust. PLR 200904014, PLR 200904015, PLR 200904016.

S-Corporation Election Not Terminated by Convertible Debt

IRS privately ruled that an S-corporation that inadvertently created a second class of stock by issuing notes convertible into stock was allowed to continue as S-corporation as long as corrective adjustment were made.

Estate Credited for Additional Charity Deduction

Estate was given credit for additional charitable contributions for portion of settlement payments that were made to charitable beneficiaries and involved stock willed to non-charitable beneficiaries, who were alleged to have manipulated stock/stock's disposition so as to keep decedent from selling it and to preserve it for their benefit. (Estate Of Eugenia F. Williams, et al. v. Commissioner, (2009) TC Memo 2009-5)