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IRS Business Purpose Doctrine SLAT/DAPT Family LLC Audit By Chris Moss CPA Welcome to TaxView with Chris Moss CPA Tax Attorney If you have been following TaxView with Chris Moss CPA Tax Attorney regarding Irrevocable Spousal Lifetime Access Trusts and Domestic Asset Protection Trusts (SLATs and DAPTs) we have recommended best practice in 2019 is to have your Irrevocable SLAT/DAPT own your Family or Holding LLC partnership with your spouse, children and grandchildren as beneficiaries, and to transfer as much of your assets to your family Holding LLC as you can prior to the 2020 elections. However, there are IRS traps waiting to be sprung, as the Government waits, patiently I might add, until you die, disallowing your 2019 gift tax returns and bringing back all those assets ($22.8M married in 2019) back into your estate to be taxed at whatever rate Congress has enacted at the time of your death. The trap? The Business Purpose Doctrine of Court made case law and the IRS Code Section 2036(a): Your estate plan must have a legitimate non-tax business purpose. Seems simple, but perhaps not so simple. How to avoid this trap? Stay with us here on TaxView, with Chris Moss CPA Tax attorney to find out how to easily maneuver past this trap so your SLAT/DAPT and family Holding LLC will be created on a solid structural foundation to withstand the IRS storms ahead when your estate gets audited years after your passing. |
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IRS LOAN-OUT ESTATE PLAN AUDIT By Chris Moss CPA Welcome to TaxView with Chris Moss CPA Tax Attorney For those of you married couples who earn substantial income in the entertainment industry, the 2019 best estate plan in my view is to have your Loan-Out LLC owned by a Family LLC or what I refer to as a Holding LLC. Why? If your retired parents, the “grandparents” of your children, have already gifted to you up to the their lifetime exemption---which in 2019 is a record $22.8M married and $11.4M single, the Loan Out estate plan might allow them to “invest” rather than “gift” additional assets to Holding LLC as part of a comprehensive estate plan. Such an investment would transfer assets prior to the 2020 elections, thus avoiding the possible decrease in 2021 of their lifetime exemptions. Ask your CPA Tax attorney to create SLAT/DAPT his and her trusts in one of 17 DAPT friendly states to own the Holding LLC to keep the structure safe and protected when the IRS audits your parents estate years later claiming that the additional investments your parents made were in fact disguised gifts or worse never left their estate at all. How? Stay tuned in to TaxView with Chris Moss CPA Attorney and find out how to bullet proof your entertainment industry Loan-Out estate plan from IRS attack. |
