Applicable Federal Rates and Code Section 7520 Rate for August 2018

Posted in Applicable Federal Rates (AFRs), Internal Revenue Code

The applicable federal rates (AFRs) under Internal Revenue Code (Code) Section 1274(d) and the Code Section 7520 rate (7520 rate) for a particular month are published by the Internal Revenue Service (IRS) in a Revenue Ruling that is released around the 18th day of the immediately preceding month. Advance knowledge of the rates for the future month provides a window of opportunity for the quick or delayed implementation of income, gift, and estate-tax planning techniques in response to upward or downward trends. The effective implementation and management of interest-sensitive estate planning techniques also involves numerous other factors in addition to the relevant AFR or 7520 rate, including a client’s particular circumstances, and should be undertaken with the advice of competent tax counsel and financial advisors.

 

The IRS has issued Revenue Ruling 2018-21, which provides the AFRs and 7520 rate for August 2018.

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Supreme Court Internet Sales Tax Case Will Require Many Companies to File State Corporate Income Tax Returns – Even If They Are Not Subject to Sales Tax

Posted in Income Tax, State Tax

Although the sales tax collection obligation of online retailers was the focus of last month’s momentous U.S. Supreme Court case South Dakota v. Wayfair, it will also impact state corporate and income tax obligations. Companies may now be exposed to state income tax as a result of the Wayfair case and should examine their activities in the states and may wish to consider entering into a voluntary disclosure agreement with these states.

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Supreme Court’s Online Tax Decision Will Impact Cloud Computing and Software Industries

Posted in State Tax

On June 21, the U.S. Supreme Court decided South Dakota v. Wayfair, allowing states to tax online sales even if the retailer does not have a physical presence in the state. This decision, abandoning a 26 year-old precedent (based on a case heard 25 years before that) has shaken the retail industry. This case will create new challenges for online retailers, and is being welcomed by their brick and mortar competitors. The focus of this development has been on the online sale of goods, but it will also impact the software and cloud computing industries as well, forcing this sector of the economy to also face the changed online tax landscape.

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Greenberg Traurig Sponsors & Attends Fashion and Finance Ball

Posted in Event

Lucy Lee of GT’s Northern Virginia office was proud to sponsor and attend the Fashion and Finance Ball in New York on May 17, 2018.  The Fashion and Finance Ball benefits the Foundation Fighting Blindness, an organization driven to expand research that will help in providing preventions, treatments, and cures, for those affected by retinal degenerative diseases.  Hundreds of attendees, including service providers to top corporations, were able to raise over one million dollars to allocate to research.  

Guests Steve Alper (managing director of STIFEL and co-host of Gala), Lucy Lee (GT), Paul Kim (head trader and founder of Aventis Asset Management and vice-chair of Council of Korean Americans), James Lee (director of STIFEL), David Paterson (former governor of NY), and Ed Moldaver (managing director of STIFEL) supported the Foundation Fighting Blindness Fashion and Finance Ball.

Attending with GT’s Lucy Lee, Michael Heck (vice president of Morgan Stanley), Laura Lehmann, Paul Kim.

 

South Dakota v. Wayfair: Supreme Court Holds No Physical Presence Required for Online Retailer to be Required to Collect Sales Tax

Posted in State Tax

On June 21, 2018, the U.S. Supreme Court in South Dakota v. Wayfair, Inc., et al., decided (5-4 although not the usual liberal/conservative split) that an online retailer does not have to maintain a physical presence in a state in order to be required to collect the state’s sales and use tax. This opinion overturns the pre-internet era 1992 precedent of Quill v. North Dakota, finding that Quill was erroneously decided. This decision says that the doctrine of stare decisis cannot support upholding Quill, and that the internet revolution made the Court’s erroneous holding in Quill “all the more egregious and harmful.” The opinion says that a taxpayer cannot rely on stare decisis where the purpose is tax avoidance. Although the Court did not address whether this decision is retroactive, because the South Dakota law at issue is not retroactive, it did not limit its holding prospectively.

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Applicable Federal Rates and Code Section 7520 Rate for July 2018 – Upward Trend Continues

Posted in Estate Planning, Estate Tax, IRS

The applicable federal rates (AFRs) under Internal Revenue Code (Code) Section 1274(d) and the Code Section 7520 rate (7520 rate) for a particular month are published by the Internal Revenue Service (IRS) in a Revenue Ruling that is released around the 18th day of the immediately preceding month. Advance knowledge of the rates for the future month provides a window of opportunity for the quick or delayed implementation of income, gift, and estate-tax planning techniques in response to upward or downward trends. The effective implementation and management of interest-sensitive estate planning techniques also involves numerous other factors in addition to the relevant AFR or 7520 rate, including a client’s particular circumstances and should be undertaken with the advice of competent tax counsel and financial advisors.

The IRS has issued Revenue Ruling 2018-19, which provides the AFRs and 7520 rate for July 2018. Revenue Ruling 2018-19 will be in Internal Revenue Bulletin 2018-27, dated July 2, 2018.

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Tax Relief Under Tax Cuts & Jobs Act? Not for Debtors.

Posted in Internal Revenue Code, Tax Cuts and Jobs Act

In December 2017, Congress passed and President Trump signed the Tax Cuts and Job Act of 2017 (TCJA).  Effective as of Jan. 1, 2018, the TCJA is a wide-ranging change to the Internal Revenue Code of 1986 (the Tax Code) affecting individual, corporate, and international taxation.

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Applicable Federal Rates and Code Section 7520 Rate for June 2018 – Trending Up

Posted in Applicable Federal Rates (AFRs), Internal Revenue Code

The applicable federal rates (AFRs) under Internal Revenue Code (Code) Section 1274(d) and the Code Section 7520 rate (7520 rate) for a particular month are published by the Internal Revenue Service (IRS) in a Revenue Ruling that is released around the 18th day of the immediately preceding month. Advance knowledge of the rates for the future month provides a window of opportunity for the quick or delayed implementation of income, gift, and estate-tax planning in response to upward or downward trends. The effective implementation and management of interest-sensitive estate planning techniques also involves numerous other factors in addition to the relevant AFR or 7520 rate, including a client’s particular circumstances and should be undertaken with the advice of competent tax counsel and financial advisors.

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Imposing a Tax Collection Obligation on Internet Sellers–South Dakota v. Wayfair

Posted in State Tax

This week the U.S. Supreme Court heard oral arguments for South Dakota v. Wayfair, regarding whether physical presence is required within a state for sales and use tax purposes, specifically addressing internet sellers. The case is challenging the Court’s 1992 decision in Quill v. North Dakota, 504 US 298, which upheld a decision from 1967 (National Bellas Hess v. Illinois, 386 US 753) and requires physical presence within a state in order to impose an obligation to collect sales and use tax on a vendor.

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California Documentary Transfer Tax Litigation Update

Posted in State Tax

California’s Documentary Transfer Tax Act (Rev. & Tax. Code §§ 11901, et seq.) is based upon the former federal Documentary Stamp Tax Act first enacted by Congress to raise revenues for the Spanish-American War.  The federal law was repealed, effective Jan. 1, 1968, and simultaneously California, like many other states, picked up the tax with conforming legislation authorizing counties and cities to adopt their own documentary stamp tax on transferring of interests in real property.  This means that in California, in most situations, there are three levels of code related to any imposition of tax:  state, county, and city.

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