Kelson Retirement Case

In the event of the retirement of a partner with a disproportionate distribution, Code Section 751(b) provides guidance. In order for Section 751(b) to apply, the partnership must have both Section 751 and non-section 751 property. Section 751 assets include unrealized receivables and substantially appreciated inventory. Because the inventory has not appreciated by 120%, of its adjusted basis, the only Section 751 property that Boxes of Books has is its receivables. Because Bobby’s distribution of $845,000 exceeds his 35% share of $840,000, he will recognize a guaranteed payment of $5,000 under Section 736(a). Section 736(a) does not apply to the receivables

Assuming Jackie’s husband passed away within the calendar year, Jackie can elect to file a single/surviving spouse or joint return. According to Section 86 of the Standard Federal Tax Reporter, if Jackie elects to file an individual return, her base amount and adjusted base amount are $25,000 and $34,000, respectively. If she instead elects to file a joint return, her base amount and adjusted base amount are $32,000 and $44,000, respectively.

Peter had RRSPs but no RPPs. One RRSP that originally consisted of contributions of $26,000 was valued at $34,000 at date of death. Peter’s wife, Paula was named as beneficiary on this RRSP. Peter’s son, Fred was beneficiary of a second RRSP that consisted of contributions of $21,000 and was valued at $27,000 at date of death.

(e) What amount is included in Decedent’s death, Child cashes in the policy and receives $120,000?

Estate planning addresses the distribution of assets prior to a person's death. With the estate plan, the court understands the deceased's final wishes and how he or she wishes their assets to be shared. For some, the process is simple, as the assets are jointly owned or aren't of high value. Others, however, have estates that require special consideration. This is true when there are children involved or the deceased was a partner in one or more

While grantor trusts are commonly created as part of an estate plan, estate planners may inadvertently be creating income tax issues that trustees and tax preparers must deal with during the administration. When the grantor of a grantor trust dies, or the grantor trust status terminates during the life of the grantor, for the most part the tax consequences are well established. What is unclear is what happens if the grantor trust had an outstanding liability to the grantor at the death of the grantor. This paper addresses the issue and how it may be treated. Part I of this paper will briefly address the history of

Wife shall provide a Term Life Insurance Policy which names the two (2) minor children as beneficiaries thereof in an amount of no less than $75,000 and shall provide proof to the Husband of the life insurance policy yearly.

The Jain Estate is required to pay its entire annual accounting income to Sam and Janet. The estate’s personal exemption is:

As explained in the book, Gene falls into the category of those who could afford to retire but choose to continue working; he has continued working even though he and his wife had sufficient combined benefits to retire. However, “Lois Smith’s own benefits would not have enabled her to lead a financially comfortable retirement if she were not married, and she would probably face some financial hardship if she were to become a widow” (Hutchison, 2015).

Although large surpluses during the 1960’s and 1970’s resulted in large inflation of the trust fund, because of more revenue being paid into the fund, than payments being paid out, this has started to change as the baby boom generation moved into retirement. The oldest people in this generation have already reached early retirement age (62), and the transfer of this generation from working age to retirement age will continue for the next 20 years. The decline of the ratio of number of beneficiaries to workers, is one of the root causes of program’s insufficiency.

Sonja fails to pay the second annual premium due on January 1. She dies 15 days later. When it comes to the premium which is the ordinary life insurance, the beneficiary will receive the proceeds of that policy because there is a grace period of 31 days to pay the overdue premium and by Sonja’s death occurring within that time frame of the grace period the beneficiary has the right to receive the proceeds from

Our company has been providing their employees with a pension plan for many years. However, these benefits plans have to be reviewed and possibly revised after the recent acquisition of XYZ Company. Through the use of a funding agency, payments are invested so that periodic payments can be made to the employee during retirement. Defined contribution and defined benefit are the two most common types of pension plans.

The claimant has issues managing funds. His wife takes care of his finances. He says that he could live independently but it would be hard for him. He is able to make important, future decisions and seek out any resources that might assist him in making those decisions. In the last year, the claimant’s father passed away. He has been depressed since this happened and

With the revocable living trust, Claire will be able to have her assets put in the trust, and in the future, if she becomes incapacitated, then her trustee can manage things for her, instead of her beneficiaries, or a guardian of the court. A revocable living trust will also allow upon death, privacy of Claire, her beneficiaries and her property. If the revocable trust is designed to become irrevocable upon death it will benefit the beneficiaries in ways that they can design and put several irrevocable trusts in place to protect them and other beneficiaries (Garber, 2017). Claire’s son John, could possibly contest this Living Trust since he is a beneficiary, however if the planner accurately followed State laws, physician assessment guidelines, and uses careful design, chances that John could successfully contest would be slim. John could also contest the Will or the Living Trust if he feels that her capacity level was not accurately assessed during the time of designing and signing the legal documents, hence the reason for witness testimonies along with their signatures to safeguard from such challenge (Garber,

Unlike the old days where a retiree could rest assured that they could live out the rest of their life on their pension and social security checks, the retirees of today receive their pensions paid out in a lump sum that takes the place of the pension check, but encompasses the total amount a retiree has to live on until they pass away. This creates uncertainty in the amount a retiree can spend per month, and if the total amount is sufficient to last them until they pass away. Immediate annuities help to create certainty in the financial situation of retirees. While retirees can be certain that they will receive a social security check each month, the amount of income they