Below is an overview/explanation from Webcalculators.
A new Webcalculator for charitable remainder lead trusts (CLATs) is now up and running. It includes computations of the payouts necessary to zero-out the noncharitable remainders of CLATs with increasing annuity payouts and “shark fin” CLATs in which the remainder is minimized by increasing the final annuity payment.
Delaware County has amended its fee schedule for the Register of Wills and Orphans’ Court, increasing per page certification fees to $1.00 per page, to be effective February 1, 2019. “Amendments to the Register of Wills and Clerk of Orphans’ Court Division Fee Schedules; File No. 795-2018” (Delaware Co. 12/10/2018), 49 Pa.B. 12 (1/5/2019).
Below is an overview/explanation from Webcalculators.
A new Webcalculator for charitable remainder annuity trusts (CRATs) is now up and running. It includes projections for when a trust might terminate if the trust incorporates the language of Rev. Proc. 2016-42 so that the trust terminates before it exhausts, and the 5% exhaustion test of Rev. Rul. 77-374 does not apply.
The Disciplinary Board of the Supreme Court has proposed amending the Rules of Professional Conduct to add an additional exception to client confidentiality, allowing lawyers to make disclosures the lawyer reasonably believes are necessary “to comply with other law or court order.” “Proposed Amendments to the Pennsylvania Rules of Professional Conduct Relating to Confidentiality of Information,” 48 Pa.B. 7743 (12/22/2018).
Butler County has vacated its order of October 7, 2017, in which a master of the Orphans’ Court was appointed. “Appointment of Orphans’ Court Master; MsD No. 2 of 2017” (Butler Co. 12/3/2018), 48 Pa.B. 7755 (12/22/2018).
The Orphans’ Court of Philadelphia County has entered an administrative order directing that “legacy” incapacitated person cases with no docket activity for more than 10 years, and which lack information in the court’s case management system that is needed to determine if the case is active or inactive, be marked “Deferred” until the court can review the case to determine if it is active or inactive.
This order arose out of the need to provide the Administrative Office of Pennsylvania Courts a list of all active incapacitated person cases for the new Guardianship Tracking System.
“Deferment of Legacy Incapacitated Cases; Administrative Order No. 01 of 2018,” (Philadelphia O.C. 11/29/2018), 48 Pa.B. 7634 (12/15/2018).
I have previously written that the Pa. Department of Revenue does not consider “income in respect of a decedent” to be subject to Pa. income tax, but the Department may be changing its position on the taxation of IRD, because the instructions to Form PA-40 for 2017 were different from the instructions for 2016.
- The instructions for PA-40 (for individuals) now includes the following statement about types of income that are NOT taxable: “Inheritances, death benefits, and income in respect of a decedent (IRD) as defined for federal income tax purpose for purposes of compensation (NOTE: IRD may be subject to the PA PIT in a class of income other than compensation).” The “for purposes of compensation” is new, as is the “note” in parentheses. But even the parenthetical says that IRD other than compensation “may” be subject to tax, and not “is” subject to tax.
- The PA-40 instructions also contain a cross-reference to the PA Personal Income Tax Guide, the on-line version of which was last revised on 8/24/2012, and continues to include the statements quoted above.
- More importantly, there is no similar change to the instructions to Form PA-41, for estates and trusts. Those instructions continue to state that compensation received post-death is not taxable, which is consistent with the PA-40 instructions. The only other reference to IRD is in instructions on withholdings, which refers to “income in respect of a decedent (not taxable for estate or trust income tax purposes, but includable in the value of an estate for inheritance tax purposes).”
There has therefore been a change to the instructions to Form PA-40, but no change to instructions for Form PA-41, and (more importantly), no change to the PA Personal Income Tax Guide. Whether the change in the PA-40 instructions represents the beginning of a change in policy, or a errant deviation, still isn’t clear.
This information has been added to the article “Pennsylvania Taxation of Income in Respect of a Decedent,” along with information on the income tax treatment of annuities that continue to be payable after death.
Below is an overview/explanation from Webcalculators.