While the recent IRS crackdown has increased awareness of filing requirements for foreign assets and income, the requirements regarding foreign inheritances are much less well known. As a rule, there is never a recipient income tax liability on foreign inheritances.  Estate tax (for which the estate is liable), is a different matter. If the person leaving the foreign inheritance is a U.S. citizen then it would be subject to estate tax. If not, there is no estate tax liability. Continue Reading »

The NJ Division of Taxation has added a new service that allows taxpayers to check the status of their NJ tax refund online. Taxpayers will need the Social Security number that was listed first on their return and the amount of the requested refund. To check your refund status, click here: Where’s My NJ Refund?

Did you transfer your home or property to your children? Even if they weren’t technically gifted, did you “sell” them for a dollar? If you failed to file a gift tax return, there may be an unwelcome IRS letter arriving in your mailbox soon. The IRS is currently scrutinizing real estate transfers in 15 states – yes, New Jersey and rest of tri-state area included – with additional states likely to be added. It has found that 60-90% of gratuitous non-spousal real estate transfers were not reported on gift tax returns. Perhaps you are thinking “OK, so I’ll be more careful about this in the future but unless the IRS audits me I’m fine”-think again!  If you make future taxable gifts requiring the filing of gift tax returns, those returns must disclose your prior gifts. If you do not include a gift from a prior year, the future return is false. Continue Reading »

You have money coming to you from a pending law suit, but you’re wondering whether Uncle Sam will want a share of it. The answer varies, depending on various factors such as how you were damaged, how the case is resolved and more. Here are a few facts you should know before negotiating a settlement. Continue Reading »

You may have heard that your home office expenses may not be deducted if you already have an office outside the home. This is a common misconception. While it is important to carefully examine the language of the Tax Code, in most instances it is perfectly permissible. IRS publication 463 states, “You can have more than one business location, including your home, for a  trade or business.” Sounds good, but what qualifies as an administrative office for your business? The IRS in publication 587 says: “Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements: Continue Reading »

We are pleased to announce that Steven Citron, our Tax Manager, has just earned his accreditation as a CPA/ Accredited in Business Valuations (ABV). Steven has been part of our litigation support team for over 15 years. He has many years’ experience in various forensic projects such as:  quantifying damages from fraud, complex litigated pension calculations, reconstruction of accounting records for estates, trusts and guardianships and valuations of closely-held businesses. Continue Reading »

NJ Inheritance Tax is computed on the clear market value of property transferred, valued at the date of death. In the Estate of Claire Schinestuhl,the NJ Division of Taxation determined that the shares of a publicly traded company inherited by the decedent, Claire, from her brother, Prescott Schinestuhl must be separately valued as of the date of Claire’s death and not about two years later when the sale proceeds of the shares were distributed by her brother’s estate.  Continue Reading »

The current FUTA tax rate is .06%. However, the rate could be higher under certain circumstances. When a state lacks the funds to pay UI benefits, as was the case for New Jersey in 2011, it may obtain loans from the federal government. If the loan is not repaid within a certain time period, wages paid in that state are subject to higher FUTA tax rates. Continue Reading »

The IRS website now offers a search tool that allows users to search for tax exempt organizations and check information about their federal tax status and filings. The new tool combines three former search sites into one, making it a quick and efficient way to search for organizations that:

• Are eligible to receive tax-deductible charitable contributions
• Have had their tax-exempt status automatically revoked because they have not filed Form 990 series returns or notices annually as required for three consecutive years
• Have filed a Form 990-N annual electronic notice

The Exempt Organizations Select Check webpage can be accessed at Tax-Exempt Organization Status

The IRS has added Form 8938 to the individual 1040 tax return, taking another step to collect tax on unreported interest on overseas accounts. In addition to the risk of a third party disclosing the taxpayer’s foreign accounts to the IRS, this form now puts an affirmative duty on the taxpayer to disclose his foreign accounts. The sanctions for not completing and attaching the form (when required) include numerous severe civil penalties and potential prosecution followed by a term in federal prison. If you fail to file Form 8938 or fail to report a specified foreign financial asset, the statute of limitations for the tax year may remain open for all or part of your income tax return (Form 1040) until three years after the date you filed Form 8938. Continue Reading »