Elder Law and Estate Planning Basics For Social Workers

Nurse and doctor

ELDER LAW AND ESTATE PLANNING BASICS

Sponsored by: PK Law, BrightStar Care of Baltimore City & County, and Frederick Villa
Speaker: Cheryl Jones, Attorney at Law, Elder Law Attorney

COURSE DESCRIPTION

Seminar will provide Social Workers and Case Managers the tools to reassure and guide families on best practices for paying for a nursing facility, protecting the family home and other assets, and qualify for Medicaid (on the first attempt). Seminar will also explain the importance of having basic estate planning documents such as a will, power of attorney, healthcare directive and MOLST in place.

PROGRAM OVERVIEW:

Social Workers and RN Case Managers are invited to Participate in a FREE Continuing Education Program
> 4:00 – 4:30 pm: Registration, Tour of Frederick Villa
> 4:30 – 5:00 pm: Dinner and Pre-Test
> 5:00 – 6:00 pm: Elder Law Basics
> 6:00 – 7:00 pm: Estate Planning Basics

Event details with sponors logos

Estate Planning and Elder Law Seminar To Discuss Wills, Trusts & Elder Law

Upcoming Seminar Dates:

Thursday, September 21, 2017

Thursday, October 19, 2017

Thursday, November 16, 2017

Thursday, January 18, 2018

PK Law attorney Cheryl A. Jones  hosts regular estate planning and elder law seminars in the PK Law Seminar Room located at the Towson office.

There is no fee for the seminar. Simply reserve a spot at least one week in advance. The seminars begin at 10:00 a.m. and last approximately one hour. Your questions will be answered and informational materials will be given out.

Estate Planning Attorney Cheryl A. Jones will discuss:

  • Trusts vs. Wills
  • Who Needs a Will?
  • Estate Tax Issues
  • Estate Planning Questions
  • Protecting Your Assets From The Nursing Home
  • Creative Estate Planning Strategies
  • Tax Law Changes
  • Powers of Attorney
  • Healthcare Directives
  • Probate Avoidance

To find out when the next scheduled seminar is and make a reservation contact: Rhonda King at rking@pklaw.com or 410.938.8800.

To learn more about PK Law’s Estate Planning and Elder Law Services visit our website at pklaw.com.

New Tax Credit for Student Loan Debt – Time Sensitive!

By: Cheryl A. Jones, Esquire

              Are you a Maryland resident? Do you have student loan debt? Well, good news – you may be eligible for a new tax credit on your 2017 tax return!

              The Student Loan Debt Relief Tax Credit went into effect on July 1, 2017, and provides that qualifying Maryland residents may be eligible for up to $5,000 of a state income tax credit to help them pay down their student debt.  There’s a catch, however – you must apply for the tax credit before September 15, 2017

              Maryland has set aside $5,000,000 to fund the tax credit each year, and will spread the credit among all qualified applicants.  The tax credit is available even if you attended college outside of Maryland, although the state will give priority to students who attended a Maryland college or university. 

              To qualify, you must:

              The application requires supporting documentation, including an official transcript, documentation regarding your loan(s), and a copy of your most recent income tax return, so don’t wait until the last minute to start the process.  Also, within two years of receiving the tax credit, you must apply the funds to pay down your student loans and provide proof to the state, otherwise you will need to return the money. 

              Free money toward student loan debt? Yes, please!

(h/t to Amanda Wooddell Wilhelm, CPA, SC&H Financial Advisors)

Cheryl A. Jones is an attorney in the Wealth Preservation Department of PK Law in Towson, MD, who represents a wide variety of clients on matters relating to trusts and estates, probate, elder law, and asset protection. She can be reached at cjones@pklaw.com, or 410-769-6141.

PK Law’s August Insurance Insights – Focusing On Our Fury Friends

PK Law’s Insurance Group’s August Insurance Insights focuses on our canine companions and Maryland’s strident efforts to increase protections against animal cruelty with the passing of several new laws that will go into effect on October 1, 2017.  

Next month’s issue will focus on enhanced underinsured motorist coverage and how the new Maryland law, which goes into effect October 1, 2017, affects insurers, insurance producers and consumers.

 Interested in having PK Law’s Insurance Insights delivered monthly to your inbox?

Sign Up Now

Are You Ready for the New Partnership Audit Regime?

The Bipartisan Budget Act of 2015 (129 Stat. 584, Public Law 114–74, Nov. 2, 2015, H.R. 1314) (the “Act”) contains a new partnership audit regime the implementation of which will begin for audits of partnership tax returns for years beginning on or after January 1, 2018. Even though such audits may not occur until years after the January 1 date, partners and their partnerships, ought to begin immediately to consider amendment of partnership agreements to reflect the new audit regime.

Three different regimes currently exist for auditing partnerships. For partnerships with 10 or fewer partners, the IRS generally applies the audit procedures for individual taxpayers, auditing the partnership and each partner separately. For most large partnerships with more than 10 partners, the IRS conducts a single administrative proceeding (under the so-called “TEFRA” rules, which were adopted as part of the Tax Equity and Fiscal Responsibility Act of 1982) to resolve audit issues regarding partnership items that are more appropriately determined at the partnership level than at the partner level. Under the TEFRA rules, once the audit is completed and the resulting adjustments are determined, the IRS must recalculate the tax liability of each partner in the partnership for the particular audit year. A third audit regime applies to partnerships with 100 or more partners that elect to be treated as Electing Large Partnerships (“ELP”) for reporting and audit purposes. A distinguishing feature of the ELP audit rules is that unlike the TEFRA partnership audit rules, partnership adjustments generally flow through to the partners for the year in which the adjustment takes effect, rather than the year under audit. As a result, the current-year partners’ share of current-year partnership items of income, gains, losses, deductions, or credits are adjusted to reflect partnership adjustments relating to a prior-year audit that take effect in the current year. The adjustments generally do not affect prior-year returns of any partners (except in the case of changes to any partner’s distributive share).

Under Sec. 1101 of the Act, the current TEFRA and ELP rules would be repealed, and the partnership audit rules would be streamlined into a single set of rules for auditing partnerships and their partners at the partnership level. Similar to the current TEFRA rule excluding small partnerships, the provision would permit partnerships with 100 or fewer qualifying partners to opt out of the new rules, in which case the partnership and partners would be audited under the general rules applicable to individual taxpayers. Under the streamlined audit approach, the IRS would examine the partnership’s items of income, gain, loss, deduction, credit and partners’ distributive shares for a particular year of the partnership (the “reviewed year”). Any adjustments would be taken into account by the partnership (not the individual partners) in the year that the audit or any judicial review is completed (the “adjustment year”). Partners would not be subject to joint and several liability for any liability determined at the partnership level. Partnerships would have the option of demonstrating that the adjustment would be lower if it were based on certain partner-level information from the reviewed year rather than imputed amounts determined solely on the partnership’s information in such year. This information could include amended returns of partners opting to file, the tax rates applicable to specific types of partners (e.g., individuals, corporations, tax-exempt organizations), and the type of income subject to the adjustment (e.g., ordinary income, dividends, capital gains). As an alternative to taking the adjustment into account at the partnership level, a partnership would be permitted to issue adjusted information returns (i.e., adjusted Form K-1s) to the reviewed year partners, in which case those partners would take the adjustment into account on their individual returns in the adjustment year through a simplified amended-return process. As a result, partnerships generally would no longer issue amended Form K-1s after the partnership return is filed, but instead would use the adjusted Form K-1 process. A partnership would also have the option of initiating an adjustment for a reviewed year, such as when it believes additional payment is due or an overpayment was made, with the adjustment taken into account in the adjustment year. The partnership generally would be permitted to take the adjustment into account at the partnership level or issue adjusted information returns to each reviewed-year partner. The provision applies to returns filed for partnership tax years beginning after 2017.

The new audit regime could impact partnerships in which any change of ownership occurs between the year being audited (liability arises as of the time of the audit) and the year of assessment, making purchasers responsible for a prior year’s audit and tax deficiency. The IRS will, therefore, effectively collect from those partners existing at the time of assessment without regard to any partnership agreement between the partners. As outlined above, an audit will result in the partnership, not the partners, being responsible for any tax deficiency, associated interest, and penalties assessed against the partnership. Any deficiency is to be computed at the highest individual income tax rate, but the partnership may initiate adjustments based on the nature of the income recognized in the audit and the tax status of the partner, e.g. corporate, individual, etc.

There is a process available pursuant to which a partnership may elect to charge any tax deficiency to partners existing in the audit year. However, such an election is subject to IRS approval based upon certain criteria.

Some additional points for consideration:

  • Some guidance exists on the application of the audit rules. Regulations previously stalled due to the moratorium on new regulations were republished in proposed form and the comment period ended on August 14, 2017.
  • LLCs which have not indicated to the contrary are subject to the partnership rules and advisors should consider routinely filing Form 8832 “Entity Classification Election” to avoid any misunderstanding as to the entity’s tax status.
  • If able to pass two tests, partnerships may elect out of the new audit regime, but consideration should be given to the amendment of a partnership agreement to address a possible failure of the election.
  • The new audit regime introduces the status of “partnership representative,” (which need not be a partner) which is not synonymous with a “tax matters partner” under TEFRA and provides for such person’s authority. Partners ought to carefully weigh who ought to be the partnership representative and affirmatively select the same rather than relying on the IRS to do so.
  • When considering a partnership’s election to treat partners in existence in the audit year as responsible for any deficiency of the partnership, assessed at the entity level, the partnership representative ought to keep those partners apprised of what their responsibility might be if the representative decides to make such an election, as that authority rests with such person. Clearly, that person’s role vis-à-vis the partners must be addressed in the partnership agreement. The IRS, however, has no interest in the same.

There have been reports of calls for delaying the January 1 date for implementation of the new audit regime. However, the new rules make the job of the IRS easier and are anticipated to increase revenue from partnership audits so that delay may be unlikely.

In spite of many unanswered questions revolving around the new audit regime and a possible delay in its implementation, advisors and partners ought to look to the amendment of partnership agreements now in order to, at the very least, name a partnership representative and set forth the parameters of the authority of such person between the partners. January 1, 2018 is not far off.

For more information on the new audit rules and planning for a partnership, please contact a PK Law Corporate and Real Estate Attorney or Tax Attorney.

This information is provided for general information only. None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.