Kiddie Tax Summary

The 2017 Tax Act reworked the Kiddie Tax. The Kiddie Tax acted to increase the rate of tax on the unearned income of children so that their family could not benefit from diverting investment income to children who are taxed in a lower tax bracket.

Below is an overview of the new provision that should bring you up to speed on the revisions in 3 minutes or less. A larger, more readable PDF version can be download by clicking THIS LINK.

GOT HOMESTEAD? www.rubinonfloridahomestead.com

IRS ACTS TO REDUCE INFORMATION PROVIDED TO IT FOR EXEMPT ORGANIZATIONS

I have previously noted and complained about the relentless expansion of information reporting required to the IRS. Like an unexpected cool breeze on a hot summer day, an unexpected reduction in such reporting has been promulgated for many tax-exempt organizations. This is favorable since it reduces the compliance burden on taxpayers, protects the privacy of donors, and limits the ability of the IRS to injure donors by inadvertently disclosing donor information (as has happened in the past) or inappropriately targeting groups and individuals for disparate treatment when their politics is not in accord with the current ruling party (i.e., the inappropriate screening of conservative groups).

The Treasury Department and the IRS have announced that they will no longer require many tax-exempt organizations to file personally-identifiable information about their donors as part of their annual tax return (Forms 990). This will apply to all tax-exempt groups under Code §501(c), other than those organized under Code §501(c)(3) or Code §527. The reporting left in place was deemed necessary so that the IRS can confirm charitable deductions claimed by owners were actually made.

Organizations covered by the new exclusion include labor unions, volunteer fire departments, issue-advocacy groups, local chambers of commerce, veterans groups, and community service clubs.

Thumbs up to the IRS and Treasury for this reporting relief.

Press Release, July 16, 2018

GOT HOMESTEAD? - Rubin on Florida Homestead

A Safe Harbor for Waiver-by-Deed of Spousal Homestead Interests [Florida]

Under the Florida Constitution, a decedent owner of Florida homestead property with a surviving spouse can only devise that property to the surviving spouse (although if there are surviving minor children then no devise can be made at all). Fla.Stats. §732.702 allows for written waivers of homestead rights by spouses. That statute requires “fair disclosure” of assets be made if the waiver occurs after marriage.

Recent case law, most notably Stone v. Stone, 157 So.3d 295 (4th DCA 2014) allowed a deed from a spouse to constitute a waiver for this purpose. The correctness and scope of this decision have been debated by practitioners.

By reason of Stone and other decisions, Florida has enacted Fla.Stats. §732.7025 (effective on July 1 of this year) that provides a safe harbor method of having a spousal waiver-by-deed. If a spouse enters into a deed that has specific statutory language, then the deed will constitute a valid waiver of spousal homestead rights for descent and distribution purposes (but not for creditor protection purposes or for purposes of avoiding spousal joinder on inter vivos transfers of homestead).

For those with an interest, I have a more extended commentary in the Waiver section of my treatise, Rubin on Florida Homestead (www.rubinonfloridahomestead.com). This commentary addresses whether fair disclosure is still needed, the “safe harbor” nature of the new provision, the effect of such a waiver, and the question whether the new statute applies if the deeding spouse has no legal or equitable interest in the homestead. If of interest, you can download a copy of that Section from Microsoft OneDrive at this link: https://1drv.ms/b/s!AvIWUWY7Se4ogaUrVjPseSkvCL9yvQ