Tax Archives - Neufeld O'Leary & Giusto

HOW TO GET A REDUCED SALES TAX RATE AS A RESIDENTIAL LANDLORD

On August 5, 2024, the New York Department of Taxation and Finance’s Office of Counsel published Advisory Opinion: TSB-A-24(26)S. addressing an important sales tax issue for residential landlords. The opinion was issued in response to a petition by a landlord asking the Department whether purchases of electricity and natural gas used by his residential tenants … Read more

What Happens to Your Tax Deductions When You Die?

When preparing and filing personal income tax returns, it’s common to have deductions that exceed the amount you are allowed to take on the current year’s tax return. In those cases, you may be able to carry over those losses to apply against income earned in future years. But what happens if you die without … Read more

Say Goodbye to the Stretch IRA Under the SECURE Act

IRAs and 401(k) plans are popular investment vehicles because of the tax benefits. Assets deposited into these accounts are only subject to income tax when they are withdrawn. The IRS sets a certain age at which withdrawals must start (currently 72) and provides for annual “required minimum distributions (RMDs).” These RMDs are calculated based on … Read more

U.S. Supreme Court Limits State’s Right to Tax Trust Income

If you are considering creating a trust, there are many considerations including analyzing the tax consequences. Taxation can get complicated if the trust, trustee, and beneficiaries are in different states with varying laws. Not surprisingly, many states are eager to tax trust income. The U.S. Supreme Court recently addressed this issue in North Carolina, but … Read more

Yankees Win (Even on Estate Taxes)

As the calendar turns to Spring, the Yankees evil empire will try to best its own record of World Series wins. Whether they win or not, the heirs of their deceased owner, George Steinbrenner may have won a substantial victory in the form of significant estate tax savings thanks to a recent court case. Steinbrenner … Read more

The new tax law means it is time to review your estate plan

The new tax law has gotten a lot of media coverage in New York mostly because of the loss of the State and local tax deduction and the end of the “Obamacare” health insurance individual mandate. Less attention is paid to the significant estate and gift tax changes contained in the law. These provisions may … Read more

Obtaining Disclosure of Tax Returns in Litigation

Information contained in income tax returns can be relevant to various types of disputes. Therefore, parties may seek to “discover” the other party’s tax returns. However, courts generally do not require the disclosure of tax returns —even when the returns may be relevant—due to their private and confidential nature. Instead, courts apply a strict standard to … Read more

Tax Benefits of Converting a C-Corporation to an S Corporation

Many small companies are set up as Type “C” Corporations (“C Corp”), particularly those which have been in existence for many years. However, C Corps are subject to double taxation, and as a result, businesses may want to consider converting to an S Corporation (“S Corp”) to reap the tax benefits.

Tax treatment of C Corps vs S Corps

C corporations must pay taxes on earnings at the corporate level. In addition, their shareholders are also separately taxed on amounts distributed to them as dividends. Therefore, each dollar earned by a C Corp is taxed twice before it reaches the hands of the corporation’s shareholders.

Tax Benefits of Using Your IRA Distributions to Donate to Charities

Donating to charity your IRA distributions can be an excellent way to both support causes that are meaningful to you and reduce your taxes. Fortunately, a provision of the Internal Revenue Code, which gives donor’s a significant tax benefit, was made permanent at the end of 2015 so individuals can now take advantage of the rules as an integral part of their tax and estate planning.

Minimizing Taxes When Inheriting Stock in an S Corporation

Generally, the property you inherit from a decedent receives a “step-up” (increase) in basis equal to the fair market value of the property at the time of death. The step-up is potentially valuable as it allows the beneficiary to avoid paying capital gains tax on any appreciation in the value of the asset prior to the decedent’s death upon the future sale of the inherited property. However, when it comes to inheriting shares of stock in an S corporation, beneficiaries can be hit with a significant tax bill if they are not careful about selling property owned by the corporation.

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