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Portability Deadline

The deadline for certain estates to elect portability must file Form 706.  This elections allows surviving spouses to use the decedents spouse's unused exclusion amount.    The IRS will allow late elections for estates created after 2011 and before 2014 by 12/31/2014.

Charitable Deduction of Household Goods

No deduction allowed without substantiation, ie evidence to show condition or appraisal to support value.

No bankruptcy protection for Inherited IRAs

Inherited IRAs are not protected from creditors, except if 1) a surviving spouse can take steps to treat the inherited IRA as their own IRA and 2) set up a trust to be the IRA's designated beneficiary with the heir as the trust's beneficiary.

Longevity Annuities

The IRS issued proposed regulations removing required minimum distribution (RMD) impediments to longevity annuities.  Proposed regulations permit owners to use Qualified Plans and IRAs account balances to purchase deferred annuities.  Prior to annuitization, the value of the qualifying longevity annuity contract is excluded from the account balance used to determine RMD.

501 (c)(3) Applications

Organizations with gross receipts of $50,000 or less and assets of $250,000 or less are eligible to use the new form 1023-EZ

IRS changes policy on Tax Payer Identification numbers (ITIN)

ITINs are issued to non-US citizens or nationals who are not eligible to obtain social security numbers used in tax fililng requirements.  ITINs will (1) expire if not used to file a federal income tax return for five consecutive tax years, (2) no longer face mandatory expiration if issued after 1/1/13, (3) not be deactivated until 2016, and (4) need to be reapplied for using Form W-7 if the existing ITIN is deactivated.

Amending Returns for Same-sex Couples

The IRS has provided guidance on amending 2014 tax returns, which may be appealing to same-sex couples who were legally married in a state or foreign country that recognizes their marriage.  (This is true even if the couple currently resides in a jurisdiction that does not recognize same sex marriages.)  For returns filed before 9/16/13, legally married same-sex couples can file amended returns to change their filing status to married filing separate or married filing jointly.  However, they are not required to change their filing status on a prior return, even if they amend that return for another reason.  Either way, their amended return must be consistent with the filing status they have chosen.


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Last modified: November 05, 2014