Proposed Section 457(f) Regulations

As part of the American Jobs Creation Act of 2004, a new Section 409A was added to the Internal Revenue Code.  Section 409A generally provides that, unless certain requirements are met, amounts deferred under a nonqualified deferred compensation plan for all taxable years are currently includible in gross income to the extent not subject to a substantial risk of forfeiture.

While much of the focus on Section 409A has been with respect to taxable employers, it was recognized that there was an intersection of the standards articulated in Section 409A with the existing provisions under Section 457(f) which specifically covers ineligible (i.e., not subject to Section 457(b)) nonqualified deferred compensation arrangements of tax exempt employers.Continue reading

New York view

Should the Alleged Political Activities of the Trump and Clinton Foundations Result in a Loss of Their Tax Exemption under Section 501(c)(3)?

Election year 2016 has something for everyone, including tax-exempt law practitioners. Along with the discussion of Russian hackers and pocket Constitutions have been charges against the Trump and Clinton Foundations involving whether either has violated the laws regarding their tax-exempt status. Many of the charges against both Foundations no doubt are politically motivated and have political and other legal (non-tax) ramifications. Those issues have been well-covered by the media over the past 12 – 18 months. The focus of this article will be on the implications of the allegations, if true, on the Foundations’ tax-exempt status.1Continue reading

Dusting off the Old Charitable Remainder Trust

Dusting Off the Old Charitable Remainder Trust

At Rodriguez, Horii, Choi & Cafferata LLP we have been drafting more charitable remainder trusts in the last year than had been the case for the past decade or so. Three things are driving client interest in a charitable remainder trust.

First, as the economy continues to recover, clients have seen their assets appreciate significantly in value. Second, tax increases at the federal level and in the state of California have significantly increased the taxes that would be due on the sale of an appreciated asset. Third, many donors have been reaching an age where they are looking to convert appreciated assets such as real estate or closely held stock into income for retirement.Continue reading