Details on the Iowa Inheritance Tax Repeal

iowa inheritance tax repeal

In the past week, the Governor signed Senate File 619 which repeals the Iowa inheritance tax over the next five years.  Numerous attempts have been made over the past decade to eliminate or modify the Iowa inheritance tax.  Pursuant to the bill, for persons dying in the year 2021, the Iowa inheritance tax will be reduced by twenty percent.  For persons dying in the year 2022, the Iowa inheritance tax will be reduced by forty percent.  For persons dying in the year 2023, the Iowa inheritance tax will be reduced by sixty percent.  For persons dying in the year 2024,

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Federal and State Income Tax Deadlines Extended

2021 state and federal tax deadlines

The IRS has extended the filing and payment deadline to May 17, 2021 for 2020 Federal income tax returns.  The extension applies to individuals, businesses, trusts and estates.  By extending the deadline to May 17, the IRS is automatically postponing to the same date the time for individuals to make year 2020 contributions to IRAs (Traditional and Roth), health savings accounts, Archer Medical Savings Accounts and Coverdell education savings accounts.  In addition, for tax year 2017 Federal income tax returns, the normal April 15 deadline to claim a refund has been extended to the new date of May 17, 2021. 

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Insights On The New Stimulus Package

stimulus package ppp questions

The US House and Senate have passed a new stimulus bill which has been signed by the President.  The new stimulus bill is over 5,500 pages in length.  This article will deal with the provisions involving the PPP (Paycheck Protection Plan).  The new bill contains provisions dealing with the deductibility of expenses paid with PPP funds.  There is little coverage in the press regarding such provision.  When the PPP program was first approved, it provided that the loans would be eligible to be forgiven by the SBA and that the forgiveness would not create taxable income.  Soon thereafter, the IRS

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Final Regulations on Deductibility of Expenses of Estates and Non-Grantor Trusts

business taxes, business tax deductions, deduction limits, business expense threshold limits, De Minimis Safe Harbor Expense Threshold

On September 21, 2020, the Internal Revenue Service issued final regulations in regard to the deductibility of expenses of estates and non-grantor trusts.  The Tax Cuts and Jobs Act (TCJA), which was passed previously, bars individuals from claiming miscellaneous itemized deductions for the years 2018 through 2025.  After the passage of the TCJA, there are questions on how such barred itemized deductions would impact estates and non-grantor trusts. The final regulations state that deductions for costs which were paid or incurred in connection with the administration of an estate or trust and which would not have been incurred if the

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Payout of EIP Stimulus Checks to Deceased Individuals

payout of stimulus checks

There has been much discussion among lawyers as to the payment of Economic Impact Payments (EIP) stimulus checks to deceased individuals.  The checks are generally in the amount of $1,200.00 for each taxpayer.  The Internal Revenue Service has recently addressed the issue on the Question and Answer section of its website. The IRS states that a person who died before receipt of the payment does not qualify and the payment should be returned to the IRS.  The entire payment should be returned unless the payment was made to joint filers and one spouse was alive at the time of receipt

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1031 Like Kind Exchange Relief

1031 Like Kind Exchange

Section 1031 of the Internal Revenue Service Code allows a taxpayer to defer recognition of capital gains and related federal income tax liability on the exchange of investment real estate.  The capital gains and related federal income tax liability are deferred to the time that the replacement real estate is sold.  In order to meet the IRS requirements, the seller must use a qualified intermediary to handle the sale of the property and the purchase of the replacement property. A taxpayer has 45 days from the date of sale to identify the replacement property and 180 days from the date

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Iowa Supreme Court on Gift Restrictions – Tax Insight

laws about digital assets iowa

On November 8, 2019, the Iowa Supreme Court issued an opinion in the Matter of the Application of Coe College for Interpretation of Purported Gift Restriction.  The case involves a gift of seven paintings of Grant Wood in 1976 by the Eppley foundation to Coe College in Cedar Rapids.  The gift letter stated that the paintings would be given to the college “and that this would be their permanent home, hanging on the walls of Stewart Memorial Library”. The college treated the paintings on its books as an unrestricted gift that could be sold or otherwise alienated.  In 2016 an

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Final Regulations on Increased Gift and Estate Tax Exclusion Amounts

The Treasury Department and the Internal Revenue Service issued final regulations on November 22, 2019, confirming that individuals taking advantage of the increased gift and estate tax exclusion amounts in effect from 2018 through 2025 will not be adversely impacted after 2025 when the exclusion amount is scheduled to drop to pre-2018 levels. The final regulations largely adopt the proposed regulations from last year.  The final regulations also contain four examples which illustrate the impact of inflation adjustments.  Individuals who are planning to make large gifts between 2018 and 2025 can make such gifts without concern that they will lose

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Qualified Charitable Distributions Tax Break

iowa tax law charitable donations

Qualified charitable distributions are a valuable tool in reducing taxes.  The deadline for the 2019 year is December 31, 2019.  Qualified charitable distributions are valuable if a person is taking required minimum distributions and also making charitable gifts.  Under the new tax act, most taxpayers are no longer able to itemize deductions, which includes charitable contributions, on the federal return due to the increase in the standard deduction.  As such, many taxpayers are no longer able to deduct their charitable contributions on their federal income tax returns.  A qualified charitable distribution allows an individual who is over the age of

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Tax-Free IRA Distributions to Certain Public Charities for Taxpayers 70½ and Older

tax rules for ira distribution

The Federal Path Act includes provisions to allow a taxpayer who is age 70½ or older to make tax-free distributions from their IRA’s to qualified charities. The Path Act allows an individual who is over the age of 70½ to make a direct distribution from their IRA account to a charity.  The benefit of doing such is that the amount transferred to the charity will be counted as part of the taxpayer’s qualified minimum distribution and it will also not be included in the taxpayer’s gross income for Federal and State income taxes.  In order to qualify as a qualified

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