Leave it to the Dog
October 15, 2009
So you say your kids are scofflaws, irresponsible and/or don’t need that inheritance from you anyway? And you don’t particularly want to leave all the dough to charity. So, what’s a bloke to do?
Why, leave it to the dog, of course. And you wouldn’t be the first to do so. Business Week reported recently that Americans will spend $52 billion on their pets this year–up from $41 billion in 2007.
And you’re worried about a recession?
So if Fido is going to be the object of your largesse, tune into some of the rules. In 1990, the National Conference of Commissioners on Uniform State Laws actually changed the Uniform Probate Code to permit so-called “pet trusts,” vehicles intended to provide for the care of a domestic or pet animal, and maybe even the critter’s kids!
If this fits your estate planning profile, have a talk about the particulars with your attorney–before you die.
Especially if you think your kids might take exception with the planning.
And get this latest salve from the Revenooers–one of their latest ideas to reduce their staff (and presumably thereby save some dough) is to lobby Congress to force tax return preparers to begin filing all returns electronically, and to get this program in action by 2011.
Obama likes this idea because it might save him money, but in our experience over the recent several years with the process, it’s a lot easier said than done to actually get such a plan to work universally. The technology is almost there, but not quite, and the electronic filing process is not without its hiccups and annoyances. But surely the situation will get better, now won’t it, all you government Pooh Bahs out there?
And if you think you can deduct all those legal fees you incur, think again. Generally speaking, individual taxpayers can only deduct legal fees associated with maintaining or preserving income. Some might think that the definition extends to divorce situations–commonly thought of as potentially having a deleterious impact on preserving assets, and therefore income therefrom.
But not so fast–particularly as propounded by a recent Tax Court decision. In Estate of Melcher, the court ruled that legal fees related to the determination of title to assets in a divorce aren’t deductible at all. Reports the Kiplinger Tax Letter, the divorcing couple here was arguing about the title to property that had once been the separate property of one spouse but was apparently later converted to community property. Nor can the payor deduct legal costs incurred to make the divorce court order a sale of the property. But the portion of the legal costs related to the attempt to collect the rent arising from the property does qualify.
File your 2008 extended tax return by today! No further extension is available!!
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He is also a contributor to the recently published twelfth edition of Tax Savvy for Small Business, published by Nolo. He can be reached at 831-7288, and welcomes comments below.