Tuesday, April 16, 2019

Inherited IRA's

In Private Letter Ruling 201909003, the Internal Revenue Service ruled that an IRA payable to an estate could be transferred to an inherited IRA for the benefit of the estate’s beneficiaries.  In the IRS ruling, the decedent received RMD’s from the IRA during the year of  their death and named  the estate as the sole beneficiary.  In the decedent’s will, the decedent named their entire estate to certain beneficiaries.
            The division of the IRA (of the decedent) into inherited IRA’s for the beneficiaries was not considered a taxable event.  Per the ruling, the beneficiaries can take RMD’s for each of the inherited IRA’s for the remaining years of the life expectancy of the decedent and each beneficiary is then responsible for any tax liability related to the RMD’s from their inherited IRA’s.
 Please note that this ruling applied to the facts of a certain case that was submitted and could have been avoided with proper planning on the front end.  Interested in learning more? Contact the experienced attorneys of Morris Law Group. 

Monday, April 1, 2019

Annual Report Reminder

Annual Report Reminder

Every business entity organized in Florida must file an annual report with the Florida Department of State by May 1st each year. This filing is mandatory for all business entities that wish to maintain an active status, even if no changes were made to the entity. The purpose of the annual report is to update and/or confirm the records of Florida’s Division of Corporations. Additionally, the responsibility to file falls solely upon the entity’s representative since Florida’s Division of Corporations is not required to send a reminder regarding the deadline. 

If you are a member of Morris Law Group’s Generational Planning Solutions (“GPS”) program then please disregard this notice as the filing of the annual report has already been addressed. If you are not a member of our GPS program and would like to find out more information, please contact our office today! http://www.law-morris.com/gps

The annual report can only be filed through Sunbiz, Florida’s Department of State, Division of Corporations (Sunbiz.Org). The option to file the annual report is prominently listed on the website’s homepage. In order to file the report, all you need is the Document ID Number (which can be found on Sunbiz), a valid email address and payment of the fee.

The fees for the annual report vary based on entity classification, and are as follows for 2019:
        For a Profit Corporation: $150.00
    For a Non-Profit Corporation: $61.25
    For an LLC: $138.75
    For an LP or LLLP: $500.00      

Florida’s Division of Corporations will impose a penalty of $400 for an annual report that is filed after the May 1st deadline; however, the penalty does not apply to non-profit corporations. Furthermore, this $400 late fee cannot be waived or abated.

The failure to file an annual report by the third Friday of September will result in the administrative dissolution or revocation of the business entity. Such administratively dissolved or revoked entities must then apply for restatement and pay additional fees in order to regain active status in Florida. Therefore, if you are an individual who has formed, or maintains a business entity in Florida, it is crucial that you file the annual report in order to avoid the disruption of business.

Friday, March 29, 2019

Charitable Deductions

With April 15th fast approaching, now is a time to review your charitable gifting for 2018. 
           One main tax benefit of charitable gifting is that a qualified donation entitles the donor to a charitable  deduction . Please be aware that there are certain limits on taking charitable contribution deductions.  One can also make a qualified donation of a non cash item as long as the fair market value of the item can be substantiated.  If a donor makes a qualified charitable donation from their IRA, they can also take advantage of that income not being counted as taxable income (with certain restrictions).  There are many tools that donors can utilize to fund their charitable endeavors such as donor-advised funds, private foundations and charitable remainder trusts and these are to be considered when reviewing their charitable goals.  Interested in learning more? Contact the experiences attorneys of Morris Law Group for an immediate consultation.   

Tuesday, March 19, 2019


The purpose of this post is to advise you that you may be required to file a Federal gift tax return (IRS Form 709). If you made a gift during 2018, the below summary may be critical to your tax planning.  

The due date for a 2018 gift tax return is April 15, 2019, the same due date as your 2018 individual income tax return. This date can be extended by extending the time to file your individual income tax return using Form 4868 or Form 2350. This due date can also be extended by filing a Form 8892 to request an automatic 6-month extension if you do not request an extension for your individual income tax return. However, neither of these methods will extend the time to pay gift or GST taxes due.

Outright Gifts of Cash or Property
All gifts of cash or property (in excess of $15,000) to an individual other than a spouse requires a gift tax return. As a result of the gift, your lifetime estate and gift tax exemption will be reduced by the value of the gift that exceeds the $15,000. However, no gift tax will be due with the return unless you have fully used your lifetime estate and gift tax exemption.  

Gifts of Cash or Property in Trust
When you gift cash or property to a trust, including a life insurance policy or premium payments to be made on a life insurance policy, you are making a gift to the trusts beneficiaries. If the gift to the trust beneficiaries does not exceed $15,000 per beneficiary, and Crummey notices are properly used, a gift tax return may not be required unless the trust is structured as a generation-skipping transfer (GST) tax trust. If a gift is made to a GST trust, it may be advisable to allocate the donors GST exemption to the trust. While this allocation is automatic, it is advisable to either opt out of the automatic allocation rules for record keeping purposes, or, file a return showing the allocation of the GST Exemption. If a gift to a trust exceeds $15,000 per beneficiary, a gift tax return is required to be filed.

Most CPA’s are willing and able to prepare gift tax returns. However, many prefer not to due to the complex rules that apply to the allocation of GST exemption and other special disclosures. Due to such complexities, we prefer to review all gift tax returns prepared by our client’s accountants to ensure they align with your estate planning goals.

Tuesday, March 12, 2019

MLB and State Income Tax

During the off-season, two MLB superstars signed massive contracts with the San Diego Padres and Philadelphia Phillies which could change the landscape of the league.  The location of these contracts could also dramatically change the amount they have to pay in state income tax.  Bryce Harper signed a 13-year $330 million-dollar contract with the Phillies where the Pennsylvania state income tax is a flat 3.07 percent.  Manny Machado signed a 10-year $300 million-dollar contract with the San Diego Padres that will have him paying 13.3% state income tax on his game salary when playing at home.  State income tax rates vary from state to state.  Good news for anyone looking to join the Miami Marlins is that Florida is one of the handful of states with no state income tax. 
                Find yourself in a state where you are paying heavy state income tax? Interested in taking advantage of some cost savings?  Contact the experienced attorneys of Morris Law Group for an immediate consultation.   

Thursday, February 28, 2019

Pet Trusts

Karl Lagerfeld, the famous fashion icon who died last week at the age 85, is believed to have taken extensive measures to provide for his pet cat Choupette after his death.  Mr. Lagerfeld, who also employed two private maids for Choupette, told the Numero fashion magazine last year that his cat was to inherit some of his fortune after his passing.  One way that Mr. Lagerfeld could have provided for his cat is through a pet trust. 

Pet trusts are valid in Florida. Florida Statute §736.0408 states that a trust may be created to provide for the care of an animal alive during the settlor’s lifetime.  This trust terminates upon the death of the animal.  Interested in learning more about pet trusts? Contact the experienced attorneys of Morris Law Group. 

Wednesday, February 20, 2019

State estate tax and inheritance tax

If you live in Florida, then you are in luck.  Florida residents do not have any state estate tax or state inheritance tax.  What happens if you live in a state that does have inheritance tax or state estate tax? As of 2018, six states have inheritance tax which is a state tax you pay when you receive money or property from someone’s estate.  As of 2018, twelve states and the District of Columbia imposed state estate tax which taxes estates that over a certain threshold. 
With a proper estate plan in place, one can minimize their exposure to state estate tax or inheritance tax.  Interested in learning more? Contact the experienced attorneys of Morris Law Group.