Save Your Estate

Why should the government or anyone else direct what happens with your estate assets? Why should a court, a stranger, or someone other than your choice make the medical and financial decisions for you if you become sick and incapacitated? Why should anyone other than your spouse, life partner, or the one you choose make the decisions about your illness, hospital visits, your funeral and what happens to your estate?

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Ronald J. Cappuccio, J.D., LL.M.(Tax) is a tax and business attorney practicing since 1976. Ron is a Graduate of Georgetown University, the University of Kansas and the Georgetown University Law Center. He also studied at Exeter University, UK.

Ron protects business and individual taxpayers from IRS Audits, Tax Collections (including bank levies, wage executions) and IRS Appeals. Employee vs. Independent Contractor Issues, Manufacturer, Pharmaceutical and Restaurant and Pizza audits are a special area of emphasis.

Sunday, February 26, 2006

Should Registered Domestic Partners file Joint Returns?

Should Registered Domestic Partners file Joint Returns?

Several States, including California, are permitting couples to register as domestic partners. The issue is whether the are treated as "married" under the Internal Revnue Code. The Internal Revenue Service is still grappling with the issue, which is likely to have national ramifications.

The thorniest issue centers on the basic question of how to report income on a federal tax return. For example, if one partner earns $100,000 but a stay-at-home partner earns nothing, are they now entitled to report $50,000 of income on their individual returns? If the stay-home partner's $50,000 share isn't considered income, is it a taxable gift -- or something else?

Domestic partners can't assume they'll be safe simply reporting income separately, the way they did before the state law took effect, some experts say. If the IRS decides to treat domestic partners more like married couples, some could find out later that they owe taxes because they weren't entitled to tax breaks they claimed.

Monday, February 06, 2006

New Law Restricts Medicaid Planning

On February 1st Congress passed the Deficit Reduction Act of 2005, intended to severely limit the ability of seniors to protect their assets and qualify for Medicaid coverage of their nursing home care. It significantly changes rules on transfers of assets, protection of homes, and the use of annuities.

The new law extends Medicaid's "lookback" period for all asset transfers from three to five years and makes those with valuable houses ineligible for Medicaid long-term care coverage. But the most significant change is that it also shifts the start of the penalty period for transferred assets from the date of transfer, as is the case now, to the date when the individual would qualify for Medicaid coverage of nursing home care if not for the transfer. In other words, the penalty period would not begin until the nursing home resident was out of funds, meaning there would be no money to pay the nursing home for however long the penalty period lasts. Innocent gifts to grandchildren could, years later, result in extended periods without any long-term care coverage of any kind