When determining how a trust will be treated for income tax purposes, the definition of “adverse party” is important. If certain prohibited powers are held by someone who is not an adverse party the trust will be treated as a grantor trust for income tax purposes. This means that the trust income will be taxed…
When determining how a trust will be treated for income tax purposes, the definition of “adverse party” is important. If certain prohibited powers are held by someone who is not an adverse party the trust will be treated as a grantor trust for income tax purposes. This means that the trust income will be taxed…
“Related or subordinate party” means any nonadverse party who is the grantor’s spouse if living with the grantor; any one of the following: The grantor’s father, mother, issue, brother or sister; an employee of the grantor; a corporation or any employee of a corporation in which the stock holdings of the grantor and the trust…
When a higher court sends a case back down to a lower court to take a specified action, or resolve a specific issue as determined by the higher court, the higher court is said to “remand” the case to the lower court.
A “remainder” in land, is an estate (interest) in lad that is a remnant or left over after a prior estate or ownership interest in the land ends. The prior estate and remainder estate are created at the same time and under the same legal document (instrument) such as a deed. For example, I give…
A trust that continues forever, in perpetuity, is called a perpetual trust. Other names are also sometimes used such as “dynasty trust”, “GST trust”, “generation skipping trust”, etc. However, the GST or generation skipping trust really refer to trust that consider planning for the generation skipping transfer tax and are not necessarily perpetual, although many…
A general release is the relinquishment or giving up of any claims or rights you have against someone or against a particular entity. For example, you terminate your employment and your employer is willing to give you $10,000 in exchange for a general release. This is a legal contract you would sign, in exchange for…
This is an agreement, usually contained in a broader legal document (e.g., an employment agreement, shareholders’ agreement, etc.) although it can be an independent document. It is an agreement, a “covenant”, that you will not compete against a person or business. The terms of what constitutes “competition” need to be clearly defined for the covenant…
Employee leasing is the indirect payment to another entity for the provision of employment services rather than hiring the same persons directly. Some offshore employee leasing transactions have been treated as abusive tax shelters by the IRS.
Tax saving machinations that the IRS views as excessive and for which additional penalties may be applied including potentially a penalty under Code Section 6700 which can be 100% of the gross income from the activity and which can be assessed against the promoter of the abusive tax shelter.