“Among the list is paying attention to PPP loan compliance and recordkeeping, keeping a good relationship with landlords, hiring  issues and paying attention to health and safety compliance.” - Asher Rubinstein

Richard Roman, co-owner of the massive restaurant near the top of Chicago’s John Hancock Center, stood in the dining room in mid-March 2020 fighting back tears.

Almost the entire 200-person crew from the Signature Room at the 95th, some of whom had been there for nearly 30 years, had been laid off. The wine was put into storage but nearly everything else had been cleared out. All of the equipment in the back of house was shut down.

The restaurant was going into hibernation mode—but nobody knew for how long. And Roman and his business partner had just signed a 10-year extension on their lease.

The United States and the European Union are in the midst of a damaging game of retaliatory tit-for-tariff.  Since October 18, 2019, wine, Scotch and other alcoholic beverages from the EU are now subject to a 25% tariff at US ports.  Our clients across the wine, spirits and hospitality industries are all feeling the effects, from the importers who source the products abroad, to the retailers, restaurateurs and ultimate US consumers.  There is widespread hope that a new administration in the White House will take a different path.  Both the US and EU have significant incentives to end their underlying disputes - - which are not over beverages, but instead pertain to government subsidies of domestic aircraft industries - - and remove the tariffs altogether.

As this unprecedented year comes to a close, we offer some planning tips to our clients, colleagues and friends of the firm regarding their assets, tax and estate concerns.  Foremost, there are some time-sensitive ways to save taxes that could result in much more money for your family.

When the tax law changed in 2017, the benefits to taxpayers were expected to last through 2025.  The favorable tax changes included an increase in the amount exempt from estate tax, from $5 million to $11 million per person, and a maximum capital gains tax rate of 20%.  With the upcoming presidential and congressional elections, and calls by politicians to undo these favorable tax laws, our clients wonder what they should do now, before the tax law changes again.

Fortunately, there are many strategies that allow us to benefit from the current tax law, and to lower our taxes through already-proven techniques.

If you own or control a life insurance policy, then the proceeds of the policy may be included in your estate at death and subject to estate tax.  This comes as a surprise to many people who are under the impression that life insurance is tax-free.  But through various tax and estate planning methods, estate tax can be avoided or minimized.

Owners and developers of real estate are already well-aware of the threats of litigation from tenants, guests, workers and even passers-by. But there are ways to protect one's assets from potential lawsuits.

Legal Update

Since 2009, the IRS Offshore Voluntary Disclosure Program (OVDP) has been an opportunity for U.S. taxpayers who failed to report foreign income and assets to become compliant, pay back taxes, lower their potential penalties and avoid criminal prosecution.  In March, the IRS announced that the OVDP will close on September 28, 2018. Only a few months remain to bring offshore assets into IRS compliance via the OVDP.

The IRS treats virtual currency as property, rather than a currency, which means that taxpayers are required to pay taxes on any gains when they “use” or sell the currency.  As an indication of the seriousness of the IRS focus on tax compliance for virtual currencies, the IRS recently served Coin­base, the largest public virtual currency exchange, with a summons seeking infor­mation on Coinbase customers who may not have properly reported profits to the IRS.

Legal Update

Legal Update

For tax years beginning after December 31, 2017, the IRS has adopted new rules which apply to income tax audits of partnerships and limited partnerships. These new audit rules are important because they may expose those who were not partners during the tax year under audit to the tax errors and liabilities of the partnership, which, under the prior rules, would have been the responsibility of those who were partners during the year under audit.  Minimize this new risk via proper planning and drafting.

This past Friday the President signed into effect a new tax law which will impact most if not all Americans.  While the effective date of most of the provisions of the new law is not until January 1, 2018, certain changes made by the new tax law should be addressed immediately in order to take advantage of the law before it changes.

This alert summarizes the most significant changes and provides specific recommendations for action you may want to consider in light of these changes.

Although year-end tax planning always presents challenges, recent tax reform proposals have created a unique set of challenges for taxpayers.  Despite the current uncertainty concerning tax reform, it is important to remember that the proposals are just that: proposals.  This memo highlights several potential income and estate tax-saving opportunities to consider based on current tax law, as well as strategies to receive the maximum benefit under current law and/or protection from any possible future changes.  As with planning opportunities it is important to first do the math to see if any potential opportunity will result in actual savings.  The Tax, Trusts and Estates practice at Gallet Dreyer & Berkey, LLP stands ready to assist you in making these determinations.

Legal Update

Legal Update