Capital Gains Tax Case Summary

The majority opinion relied on several Michigan Supreme Court cases to conclude that that transient use of the property as a short term rental did not constitute “private occupancy” under the restrictive covenant. Additionally, the court relied on O'Connor v Resort Custom Builders, Inc, 459 Mich 335, 336; 591 NW2d 216 (1999), which held that interval ownership did not constitute a “residential purpose” under another similar restrictive covenant. The majority opinion held that defendant’s transient short-term

3) the husband made the transfer to tenancy by the entirety at a time when to not make such a transfer would have rendered him insolvent, and

Caitlin and Wally formed the C&W Partnership on September 20, 2012. Caitlin contributed cash of $195,000, and Wally contributed office furniture with a FMV of $66,000. He bought the furniture for $60,000 on January 5, 2012, and placed it in service on that date. Wally will not elect Sec. 179 expensing on the furniture and elected out of bonus depreciation. He also contributed and office building and land with a combined FMV of $129,000. The land’s FMV is $9,000. Wally bought the land in 2005 for $8,000 and had the building constructed for $100,000. The building was placed in service in June 2008.

Under Sec. 2503, “an annual exclusion is allowed for taxable gifts, the amount of which, as adjusted for inflation, was $14,000 in 2015. However, the annual exclusion is available only for gifts of a present interest in property, which is defined in Regs. Sec. 25.2503-3(b) as "an unrestricted right to the immediate use, possession, or enjoyment of property or the income from property." Also, per the regulations, no part of the value of a gift of a future interest may be excluded from taxable

Australian Residential Tenancies Act 1997 details every aspect of landlord tenant relation and lease agreement for caravan park site owners. When we study the situation in case study closely, we notice that in both cases, the tenants may have to involve the court since their situation is tricky and can be better decided by a court dealing with civil matters.

Daniel’s proposed question to ask Martin if a documented agreement had been made to transfer property is of great significance, since Martin was a member of a joint tenancy with rights of survivorship (JTROS) with his fellow friends, and not Andrew who is the son of Martin. Notably, “Regs. Sec. 25.2518-2(c)(4) provides that, generally, a disclaimer of an interest in a joint tenancy had to be made no later than nine months after the date the joint tenancy was created” (Henderson, 1992, para. 5). A division of the joint tenancy can transpire if a joint tenant transmits “his interest in the estate to another person” (Matthis, 1987, para. 3). This action of conveyance of the interest of the property, the mountain property, for example, is an

·         What are the annual and lifetime gift tax exclusions and the estate tax exclusion? Under the United States federal law states that an individual can give $1 million of taxable gift over the course of his or her life time and not pay any tax on them. Also any of the gifts needs to be unified credit and should display his or her final estate taxes. For example if the husband and mother gives their one kid a gift of $13,000 over the 60 year time period which reflects on the percentage share in their Business would not be consider a taxable gift which is up to $ 1 million but anything over would be eligible for taxes. The estate tax is very simple and clear which shows the anyone who is eligible for receiving a gross assets and prior taxable gifts exceeding $1.5 million in 04-05, $2 million in 06-08, $3.5 million in 09, and $5 million for 2010 and later which means if the assets are exceeding these amounts are subject

You can give up to $14,000.00 to each individual. If you exceed $14,000 to any individual, filing a gift tax return is required. Read more about gift taxes in the article The Estate Tax and the Gift Tax: The Impact on your Estate.

Mark wishes to give Spring Cottage to his son, Gary. Spring Cottage has not increased in value since the death of Mark’s father; therefore, the gift will not give rise to CGT liability.

Section100-1 requires three steps to determine whether the CGT event affects a taxpayer or not. Those three steps are three questions which help the taxpayer to know how much the net capital gain or loss for the financial year. First step is determining whether a taxpayer makes a capital gain or loss or not. In this step, there are four questions that are examined the taxpayer. First of all, Section102-20 states that a taxpayer makes a capital gain (/lose) only if a CGT event happens. Also, according to Section104-20, CGT event C1 happens if a CGT asset is destroyed. In the case, the client’s concrete

The property does not have to be the primary property during the time of the sale for the situations of a couple coming together, as recalled, the exclusion rules that the property be owned by the taxpayer for more than five years and occupied by the taxpayer for more than two years before the sale, and the exclusion was not claimed in the past two years before the sale of the property.

Furthermore, the client wishes that his children will retain as much value in the company at his death. Therefore, the first item to address is to begin gifting the maximum amount per year to his children of currently $14,000 per year free of any taxes per IRC § 2503. Anything above that amount per year to the children would trigger IRC § 2501 (a) (1) “which will tax any amount over the $14,000 and need to be paid by the gift giver as opposed to the receiver per IRC § 102.” Additionally, if the donor gifts more than the yearly dollar limit, IRS form 709 is required to be filed. However, due to IRC § 2001, there may not be any actual tax owed if the amount is less than the lifetime allowable unified credit exemption which is currently $5.45 million in 2016.

i. Is this a gift in favour of the sister or a trust in favour of his friends? If it is a trust, has the settlor sufficiently shown intention to subject the property to a trust obligation? An express trust is created if only the settlor can show that he intended to subject the property to a trust obligation. It is necessary for the settlor to show that he intend to create a trust instead of some other type of legal relationship, e.g. gift, a power or bailment.

On the contrary, in Bruton court’s understanding of “exclusive possession” was a relative concept. Exclusive possession granted to Mr. Bruton was found based on the fact that he was not required to “share possession with the trust, the Council or anyone else”[13] and “the trust did not retain such control”[14]. Whether the grantor possesses title or not was held to be irrelevant. Nevertheless, since LQHT in fact could not exclude the true owner (i.e. the Council) from taking possession, the exclusive possession enjoyed by the “tenant” would be “only as against the grantor and not the rest of the world”[15] and practically dependent on the contractual relationship. This has received support from later cases applying Bruton. In Islington LBC v Green[16]with similar facts to Bruton, the tenant raised an argument that the

Held: the reduction of privacy was not within the scope of this covenant. It was held that there was no breach because it did not prevent the use of the premises as residential flats.