Cummings & Lockwood

Alerts & Updates

2024 Private Clients Annual Update

September 18, 2024

We hope that you and your family are enjoying a healthy and happy 2024.  As another year passes, we once again find ourselves facing uncertainty concerning the future of the federal gift, estate and generation-skipping transfer (“GST”) tax regime resulting from both the upcoming 2024 federal elections and the scheduled sunsetting of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) on December 31, 2025. 

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Taxpayer Liable for Taxes on S Corporation Income Embezzled by Other Shareholders

September 5, 2024

One of the requirements to be treated as an S corporation for federal income tax purposes is that the corporation can have only one class of stock. This requirement means that all of the outstanding stock must confer identical rights with respect to distribution and liquidation proceeds.

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Connecticut Modifies Retirement Income Withholding Requirements and Other Tax Law Changes

July 29, 2024

Governor Ned Lamont recently signed legislation which modifies a number of important Connecticut tax provisions.  Most modifications become effective for tax years beginning on or after January 1, 2025 and include:

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CONNELLY v. UNITED STATES: Supreme Court Weighed In on the Valuation of Closely-Held Companies for Estate Tax Purposes

June 27, 2024

Succession planning for many closely-held and family businesses will be impacted by the Supreme Court’s June 6, 2024 ruling in Connelly v. United States.  In the case, the Court  unanimously upheld the IRS’s position that life insurance proceeds payable to a company to fund its obligation to redeem shares from a deceased shareholder are an asset that increases the company’s fair market value. 

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Connecticut Passes Decanting Statute to Provide Greater Flexibility to Modify Old Trusts

June 10, 2024

On June 5, 2024, Connecticut followed a number of other states by passing a “decanting” statute which specifically authorizes decanting of irrevocable trusts in Connecticut.  Decanting is the act of a Trustee distributing the assets from a trust (“Old Trust”) into a new trust (“New Trust”) which has different terms that are more suited to the current circumstances. 

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IRS Concludes Trust Distribution Prior to Sale Does Not Violate Like-Kind Exchange “Held For” Requirement

May 30, 2024

Internal Revenue Code Section 1031 allows taxpayers to defer federal income tax on the sale of real estate (relinquished property) if the sales proceeds are reinvested in business or investment real estate (replacement property) (a “like-kind exchange”).

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Connecticut Plans to Fight Back Against New York's Remote Work Tax (Sort Of)

March 6, 2024

In most cases, an employee who lives in one state (State A) but works for an employer in another state (State B) is taxed by State B only on wages earned during days he is physically working in State B.

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2023 Cummings & Lockwood Firmwide Annual Update

January 30, 2024

We are pleased to bring you Cummings & Lockwood’s 2023 Firmwide Annual
Update. It includes our Chairman’s letter, as well as highlights some of the significant
legal work we have performed for clients in each of our four practice areas, the
philanthropic organizations we have supported, and the professional recognitions we
have received based on the quality of our legal counsel and representation.

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Tax Court Decision Exposes Limited Partners To Self-Employment Tax

January 3, 2024

Under U.S. federal income tax law, self-employment tax is imposed at a rate of 15.3%, with 12.4% for Social Security and 2.9% for Medicare.

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2023 Private Clients Group Annual Update

December 14, 2023

It is hard to believe another year has passed and, as is customary, we are writing our annual letter to provide you with an update on various tax and estate planning issues and to highlight some items which may be of interest. 

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Massachusetts Provides Clarity Regarding Millionaires Tax

December 13, 2023

Starting with the 2023 tax year, certain Massachusetts taxpayers are required to pay a 4% surtax on taxable income in excess of $1 million.  This so-called “Millionaires Tax” is imposed on top of the state’s current 5% flat income tax.

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IRS Delivers Early Christmas Gift by Delaying Form 1099-K $600 Reporting Threshold

November 29, 2023

IRS Form 1099-K (Payment Card and Third Party Network Transactions) is used to report payments and transactions from e-commerce payment platforms, apps and payment card processors such as Venmo, Paypal, Cash App, Etsy and Ticketmaster.

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