When is a Survival Statute Not a Survival Statute
According to Gary Rosin, it is "when the legislature (bar committee?) forgets to check all the moving parts. See a discussion of the problem at his blog.
Texas Allows Series LLCs
Texas recently amended its LLC law, effective Sept. 1, 2009, to provide for series LLCs. More information, including a link to the enrolled version of the bill signed by the Governor, is on
the Unincorporated Business Law Prof blog.
Discussion of Jorgensen, Another FLP Case
Steve Akers of Bessemer Trust discusses the Jorgensen case here. Make particular note of the things you should avoid if you want to have your family limited partnership respected for estate tax purposes, including:
- You need to have real and provable, non-tax reasons to form the FLP.
- You need to respect the FLP as a separate entity.
- you must follow all the legal formalities.
- you should keep business books and records.
- you should make sure that partnership management has charge of the partnership's assets, including its checkbook
- don't make disproportionate distributions particularly to pay personal expenses.
Is There a Permanently Severable "Wind Estate" In Texas?
Lisa Chavarria’s article on The Severance of Wind Rights in Texas was recently published on the Dallas Bar Association’s website. The article recognizes that there are questions about whether there is a severable real property estate consisting of wind rights. Legislative guidance may be necessary, particularly if the Texas courts don’t address this issue soon.
Continue Reading...Texas Schools Using Wind Tax Abatements to Avoid "Robin Hood" Tax
Danny Robbins reports that many school districts have granted tax abatements for wind projects and the results are more income to the school districts. See, Texas Schools Get Millions from Wind Farm Deals. But those payments are in lieu of taxes instead of in the form of taxes. Therefore, the school districts do not include those receipts in the formula for determining the amount of tax revenues that they must return to the State of Texas to fund the statewide equalizing payments for education expenses. This has created a controversy explained in more detail in Robbins' article.
Gifts by Parents to Fund a Child's Roth IRA
A recent article (Family tax savings compound when a parent funds a child's Roth IRA, R.E. Coppage and L.M. Blum, 82 Practical Tax Strategies 212 (April 2009).) presents an extremely interesting idea – gifting to provide a child funds to contribute to a Roth IRA. Article describes how, not only does the child reap the usual benefits from a Roth IRA and from early retirement savings, but there is also a net tax savings within the family as a whole when such a plan is implemented. Considering the magnitude of the accumulated tax savings, the authors believe a cash gift to fund a child's RIRA contribution is one of the most caring, thoughtful, and practical gifts a parent can make to a child, and I would agree with their conclusion.
Argument for Continued Expansion of Wind Power Projects
Paul Sadler, Executive Director of the Wind Coalition, believes that effective power storage will someday be an economical reality. Therefore, we should continue developing wind energy capacity. See, The answer is in the wind.
Wind Credits Giving Way to Direct Financial Aid
Wind developers have in the past relied on wind energy income tax credits to attract capital investment in their projects. But those credits require taxable income to remain usable. In the current economic times, investors with taxable income are harder to come by.
Some wind developers are now looking at whether the direct monetary aid contained in the American Reinvestment and Recovery Act might be accessible as reported in Wobbly wind sector sets sights on stimulus.
Using the Tax Code to Breach a Contract
According to Charlie Rangel, the Chairman of the House Ways and Means Committee, The tax code is not “a political weapon.” That was just a few days ago. Now the House has passed a bill that would confiscate payments made under contracts between AIG and its employees. How quickly the worm turns.
Continue Reading...What are your chances for being audited?
The IRS has issued its annual data book, which provides statistical data on its 2008 fiscal year. The data book provides valuable information about how many tax returns IRS examines, and what categories of returns IRS is focusing its resources on, as well as data on other enforcement activities, such as collections. A total of 1,391,581 individual income tax returns were audited during FY 2008 (Oct. 1, 2007 through Sept. 30, 2008) out of a total of 137.8 million individual returns that were filed in the previous year. This works out to 1.0% of all individual returns filed (about the same as the audit rate for the preceding year).
Continue Reading...