Dramatic changes in the real estate market over the last decade have led to more frequent disputes between property owners and tax authorities regarding the appropriate value of real estate subject to real estate taxes.
A recent decision by the Ohio Supreme Court may make it easier for property owners to get some relief when the value of the property has declined since it was acquired.
The budget bill signed by President Barack Obama on Nov. 2 included a significant change in the way IRS partnership audits will be handled.
Partnership audits have become a more pressing issue for the IRS as more businesses are taxed as partnerships, including limited liability companies.
Because the IRS must generally assess and collect any deficiencies from the individual partners after a partnership audit, enforcement can be difficult.
The new rules will allow the IRS in most cases to assess any additional tax against the partnership itself instead of having to proceed against the individual partners.
Estate planning attorneys have been using discounting techniques as an important part of wealth transfer planning for many years.
Recently, there have been indications that regulations will be issued soon by the Treasury Department that will significantly curtail this practice.
While the higher federal estate tax exemptions put in place several years ago have lessened the need for discounting for most people, those with taxable estates over the exemption amounts should consider whether action needs to be taken soon to take advantage of the current law.
By CARL GRASSI
Published in Crain’s Cleveland Business
June 11, 2012
Amid all the focus on rising income tax rates beginning Jan. 1, 2013, a new tax is set to go into effect at the same time for many taxpayers.
Like the expiration of the current lower tax rates on most types of income, this tax will become law on Jan. 1 of next year unless there is specific legislative or judicial action.
This new tax — the surtax — is essentially an additional Medicare tax and was part of the 2010 health care act. The surtax is a 3.8% tax on the investment income of people whose income exceeds certain thresholds described below.