Planning Potpourri

◙ Readers’
Comments:

Qualified Joint
Venture – May 2008 Recent Developments discussed CCA 200816030. For a husband
and wife to make the election under Code Section 761(f) to avoid filing a
partnership tax return, they must be conducting a “trade or business”. The IRS
has indicated that the spouses must own the business as co-owners and not in
the name of a state law entity. [Thanks to Todd Wieseneck, Esq.]

Appraisals –
August 2008 Lead article “Appraisals: Key to Planning” mentioned that the
factors noted in Revenue Rulings 59-60 and 68-609 should be considered. Of the
two, 59-60 remains the primary source. According to one expert the capitalized
excess earnings method of 68-609 is not commonly used. [Thanks to Kenneth Arlein].

◙ Rental Real
Estate Clean Ups:

It appears that
environmental issues are not the only clean up many property owners have to
worry about. The government has estimated that 53% of individuals owning rental
properties inappropriately report their tax results, to the tune of an
aggregate $12.4 billion understatement. That’s not chickenfeed. Expect tougher
tax audits of real estate rental activities. If you’re being loose with your
compliance clean up your act before Uncle Sam begins what will likely be a
crack down. GAO-08-956. See the full report at http://www.gao.gov/new.items/d08956.pdf.

◙ Declining
Insurance Rates:

Good News: Life
insurance rates are declining, in part due to increased mortality. With the
stock market meltdown, one source of savings might be to review your insurance
coverage and see if you can identify any opportunities for cost savings. Bad
News: For those of you who got snookered (whether by a broker or your own
greed) into buying an insurance policy with the intent to sell it in a couple
of years, the deal just got worse (apart from other clamp-downs on such
policies). Increased life expectancy means buyers will pay less for those
policies! Evaluate your options with an independent insurance consultant.