Post-Gift Asset Exchange

Money BowJay D. Waxenberg and Nathan R. Brown briefly discuss the idea of post-gift asset exchanges in the July 2014 issue of Trusts & Estates, in an article entitled, The Narrowing “Tax Efficiency Gap”.  The concept surprised me.  It reflects the need for yet another shift in the focus of estate planning.  With the current large exemption from gift and estate tax ($5.34 million in 2014), it is no longer enough to get assets out of an estate in order to keep them from being estate-taxed at the older generation’s death.  We also have to attempt to do it in a way that minimizes the income tax consequences for the younger generation.

Traditionally, we would advise our clients to keep assets that are already highly appreciated in value, in order to take advantage of the step up in basis to date of death value when they pass away.  We would select assets for giving that have a high expectation of future appreciation. … Read more

Reviewing and Obtaining Credit Reports & Scores

Credit ReportReviewing your personal credit report on a regular basis is an important step in preventing and detecting identity theft.  Most people are not aware of the fact that Federal law entitles everyone to a free annual credit report.  The best and simplest way to obtain the credit report is not from one of the many trendy free credit report websites advertised to us via online and television ads.  Instead, you may access your truly free credit report at This site gives you access to reports from all three of the consumer credit reporting companies.  You choose whether or not to access all three reports at once, or to spread them out over the course of a year.  From an identity theft standpoint, spreading the reports out is your best bet because it enables you to monitor the reports on a more continuous basis.  Once you obtain the credit report, you should review it to make sure that you recognize all the accounts, loans, and other information (such as places you have lived, etc.) on your report. … Read more

Packer Thomas Is Proud To Support The OFIC’s Ohio Scholars Program

ofic logoFor over 20 years, Packer Thomas has been a proud supporter of the OFIC’s Ohio Scholars Program.  The program is designed to help donors create and fund scholarships, through charitable contributions, for students in their community to attend an independent Ohio college or university.  The Ohio Scholars Program has assisted more than 17,500 students with over $30 million in scholarships and is the largest statewide program of its kind.  To learn more, visit The Ohio Foundation of Independent Colleges’ website at

 … Read more

Fraud and the Trusted Employee

Fraud-2Business owners do not like to hear stories about fraud nor do they believe it could ever happen to them.  However, fraud is very real and very costly. What is even more upsetting is that the majority of employee frauds are committed by the most trusted employees.

Some of our more recent fraud cases involve trusted and long time employees. One involved a manager that was not performing the oversight function he claimed he was doing. The manager’s trusted staff person, of many years, committed fraud by purchasing personal items on the manager’s company credit card. Another case involved someone that had been with an organization for over twenty years and was stealing cash before the funds were taken to the bank. Failure to implement and failure to actually perform strong internal controls are the reasons these frauds were committed and went undetected for a long period of time.

Sound internal controls can help you to prevent or detect fraud.… Read more

Bross Trucking, Inc., et al v. Commissioner

truck (18)[1]TC Memo 2014-107

When corporations sell their assets, the sale is taxed twice:  once at the corporate level when the corporation pays tax on any gain on the sale and, again, when the proceeds of the sale are distributed to the owners as taxable dividends.  It is not surprising, then, that when a business sells all of its assets, sellers look for ways to alleviate this tax burden.

One such strategy is to take the position that the goodwill inherent in the transaction is attributable to the business owner’s personal efforts and that the goodwill is “owned” by the business owner.  That way, the business owner can sell the goodwill directly to the buyer and report the gain as long-term capital gain, taxed at lower tax rates, and subject to only one level of tax on the seller’s personal return.

There is an often-quoted case where that very position was taken and successfully argued in court. … Read more

The Importance of Being Involved in Your Community

CommunityWe hear it all the time that community involvement is important to be successful in life. It helps you connect with others, it improves lives and strengthens communities but most important is the intangible benefits of pride, satisfaction and accomplishment.  It warms your heart in knowing you are giving back. I am involved in various community events, as is our Firm, and I am also on several committees and Boards.

I take care in deciding whether or not to participate on a certain committee or Board so that I am not just saying yes to add the Organization to my list of involvement but rather I make sure it is something I am passionate about and one that I plan to be fully committed to and participate in.

At Packer Thomas, we really stress the importance of community involvement with all of our staff and Principals. This is evidenced by our Facebook page which reveals pictures of our community events.… Read more

Have you timely deposited your employees’ elective deferrals into the 401(k) plan?

Piggy BankPlan sponsors have a fiduciary responsibility to make sure employees elective 401(k) deferral contributions are submitted to the Plan as soon as possible. The Department of Labor (DOL) has been placing greater pressure on plan sponsors to comply with the deposit requirements of segregating the contributions from its general assets as soon as reasonably possible (but no later than the 15th business day of the month following). Many plan sponsors mistakenly interpret the Department of Labor regulation to permit them to wait until the 15th business day of the following month to deposit 401(k) elective deferral contributions, even if they can segregate the funds earlier. For example, if the pan sponsor has demonstrated that they can segregate the funds in 2 days, then any remittances in excess of 2 days would be deemed late.

Small plans that are not required to have an annual audit must comply with the deposit requirements as well; however, there is a 7 business day safe harbor rule for plans with fewer than 100 participants.… Read more

Tax Related and Government Benefit Identity Theft

Identity Theft FingerprintTax related identity theft is a growing problem which affected more than 450,000 people in 2012 alone.  Tax related and government benefit identity theft is now more common than identity theft involving financial assets, such as credit cards and bank accounts.  It used to be that the “fraudsters” would obtain social security numbers (SSN’s) and other personal information via “dumpster diving” or by stealing the information from an individual’s mailbox.  No doubt this still happens.  However, the new and improved method of obtaining personal information now involves stealing SSN’s by the thousands via records obtained from hospitals, universities, nursing homes, and other similar organizations who collect this information from the individuals they serve.  Typically, tax return identity theft is perpetrated in one of two ways. The first way involves filing a fraudulent tax return with false income & tax withholding information using the SSN of another individual in an effort to obtain an illegitimate tax return refund. … Read more