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You can ‘swap’ for property you gave to a trust

Can you put property into a trust, but keep the power to take it back again as long as you substitute other property of equal value?  Yes in some cases, according to an IRS ruling. This means you could put real estate, artwork, an insurance policy or other property into a trust, and keep the power to take it back for yourself, as long as you’re willing to pay the fair market value of it to

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Do you want to leave someone your mortgage?

If you plan to leave a house, car, business, or other property to one of your heirs, and the property is subject to a mortgage or other debt, do you want o leave it with the debt? Or do you want the debt to be paid off from your other assets so the person receives the property debt free? Surprisingly, many people don’t think about this question when they write their will.  But it can have

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Trust can’t deduct full cost of investment advice

A trust can’t deduct on its tax return the entire amount it spends for investment advice – at least in most cases, the U.S. Supreme Court has decided. The case involved a trustee who paid $22,000 for investment advice.  He tried to deduct this amount from the $625,000 in income the trust reported on its tax return. For an individual, investment advisory expenses are a “miscellaneous itemized deduction” and they can be deducted only to the

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Tax-smart ways to pay for your grandchildren’s education

With the cost of education skyrocketing, many people want to contribute to their grandchildren’s tuition costs.  A variety of ways are available to do this, which also have estate-planning benefits. All these ideas apply not just to grandchildren but to grandnieces, grandnephews, great-grandchildren and others. The simplest solution is for grandparents to pay the tuition costs directly.  Not only does this provide a benefit to the grandkids, but it also gets assets out of the grandparents’

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Employee could be required to work on Sabbath

For 10 years, a U.S. Postal Service letter carrier in Ohio was allowed to avoid working on Saturdays to accommodate his Jewish faith. But when budget constraints forced the Post Office to reduce staffing levels and require more carriers to work on Saturdays, other employees became unhappy with the man’s arrangement. The accommodation was eliminated after union members voted to recommend its termination. The postmaster suggested to the man that he reserve some of his vacation

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Workers’ comp may cover ‘recreational’ injuries

If employees get together for a recreational activity and someone gets hurt, is that covered by workers’ compensation? It depends. It can be, but there are usually many factors involved, including whether the recreation occurred during company time; whether the company encouraged, sponsored or required the activity; and whether the company benefited from the activity. In one case in Hawaii, an employee was injured at an after-work bowling tournament. The tournament was intended to thank employees,

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Handwritten contract leads to $10.5 million verdict

A contract that an executive quickly scrawled on two pieces of notebook paper was not only binding, but was the basis for a $10.5 million jury verdict. This case goes to show that just because a business agreement isn’t contained in a formal document doesn’t mean you can’t be held to it. The chairman of a telecom company met at his office with a former employee who was considering starting a new venture. Unexpectedly, the chairman

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Employees can sue even if they’re only ‘perceived’ as disabled

Employees don’t have to be disabled to sue under the Americans With Disabilities Act – they merely have to be regarded as disabled by their employer. That’s why it’s essential, whenever you have an employee with any sort of impairment, to fully understand the nature of the impairment and not leap to conclusions about what the employee can and cannot do. A recent case illustrates the potential problems. An electrician at an aluminum can factory suffered

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Congress outlaws genetic discrimination

A company can’t refuse to hire people because they are genetically disposed to develop a particular disease or condition, even if this would cause the company’s health care costs to skyrocket. That’s the result of the federal Genetic Information Nondiscrimination Act, which was recently signed into law by President Bush. The law also prohibits insurance companies from using genetic information to deny coverage or increase premiums.

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Supreme Court limits out-of-state taxes

A new ruling from the U.S. Supreme Court is good tax news for companies that operate in multiple states. The case involved a packaging company that was based in Ohio and did business in Illinois. The company had a separate Ohio-based subsidiary with an unrelated information-technology business. When the company sold the subsidiary, it had a significant capital gain. Illinois wanted to impose a tax on a part of the capital gain. It said it should

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