Lindabury, McCormick, Estabrook & Cooper, P.C. is please to announce that 15 of the firm’s have been selected for inclusion in The Best Lawyers in America 2023.
It is very common for parents to provide funds to their children over their lifetime, but are these transfers gifts or loans? A recent ruling in the Tax Court, Estate of Bolles v. Commissioner, T.C. Memo. 2020-71, 119 T.C.M. (CCH) 1502 (June 1, 2020), highlights the importance in estate planning of differentiating between loans and gifts.
Mary Bolles was a loving mother of five children whom she tried to treat equally. Her practice was to keep a record of her advances to and the occasional repayments from each child. Based on her intent and the advice of tax counsel, she treated the advances as loans. She forgave the “debt” account of each child every year to the extent of the annual gift tax exclusion amount. According to the Tax Court, her practice would have been noncontroversial had she not advanced substantial funds to one son, Peter.
When Peter ran into financial difficulties with his architectural business, Mary supported him and between 1985 and 2007 she transferred $1,063,333 to Peter or for his benefit.
On December 17, 2020, the New Jersey legislature passed the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (the “Act”), providing the framework for legal adult recreational cannabis use in New Jersey. The Act lays out the ground rules for licensing arrangements for the cultivation, packaging, distribution, advertising, and retail sale of recreational cannabis to persons 21 years old or older. Governor Murphy signed the legislation into law on February 22, 2021.
It is important to note that the passage of the Act does not immediately make “street pot” legal—instead, it provides the roadmap for businesses to become licensed so that they may take part in the future legal adult recreational cannabis market in New Jersey. Cannabis, however, will no longer be a Schedule 1 controlled dangerous drug under New Jersey law (although it remains so at the Federal level).
Although the Act is over 200 pages long, it still requires that the New Jersey Cannabis Regulatory Commission (“CRC”) develop regulations to flesh out the details of how these arrangements will all be put into practice. For example, there are currently no application forms to apply for any license to operate in the cannabis market in New Jersey. These forms, their instructions, and a host of other details all need to be developed before any business can apply for one of the required licenses. The CRC has been given 180 days to develop these enabling regulations and forms. That said, individuals and businesses interested in entering into this market will want to keep apprised of the details of these ongoing regulatory developments so that they can position themselves to have already put arrangements in place which will allow them to immediately move forward with the application process as soon as it becomes available.
In November 2020, by a vote of 67.08% to 32.92%, the voters of New Jersey passed a ballot measure to amend New Jersey’s Constitution to make use of recreational marijuana by those over age 21 legal in New Jersey beginning on January 1, 2021. However, until legislation is signed by the Governor and rules and regulations are issued by the Commission, the details on legalization and the cannabis industry rollout are hazy. And, what may be worse for New Jersey employers, is the considerable uncertainty regarding how they can maintain a drug free workplace.
When will recreational marijuana become legal?
With voter approval to legalize weed, it is clear that there exists considerable pressure to quickly pass legislation which explains how New Jersey’s recreational marijuana program will roll out. And while some might suggest that recreational marijuana became legal in New Jersey on January 1, 2021, because the ballot measure contemplated a highly regulated and taxed recreational cannabis market, most agree that recreational marijuana is not, in fact, legal until New Jersey’s recreational marijuana law and regulations are enacted.
Until now, the CDC recommended a 14-day quarantine for individuals who might have had “close contact” with a person who has or is suspected of having COVID-19.[1] This quarantine was longer than the 10-day recommendation for those who test positive, as the longer quarantine period is based on estimates of the upper boundaries of the viral incubation period. However, in its new guidance issued December 2, 2020, the CDC acknowledged three adverse consequences of the 14-day quarantine:
On June 19, 2020, the IRS released Notice 2020-50, which provides additional guidance and relief for retirement plan participants taking coronavirus-related distributions and loans under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Under the CARES Act, “qualified individuals” may take coronavirus-related distributions of up to $100,000 from their eligible retirement plans without being subject to the 10% additional tax on early distributions. In addition, a coronavirus-related distribution can be included in income ratably over the three-year period commencing with the year of distribution and the individual taking the distribution has three years to repay the distribution to the plan, or roll it over to an Individual Retirement Account (“IRA”) or other qualified retirement plan, with the effect of reversing the income tax consequences of the distribution. In addition, the CARES Act allows plans to suspend loan repayments due from March 27, 2020 through December 31, 2020 and further allows for an increase in the dollar amount on loans made between March 27, 2020 and September 22, 2020 from $50,000 to $100,000. Notice 2020-50 expands the definition of qualified individuals under the Act and provides additional, clarifying guidance regarding coronavirus-related distributions and loans.
Expansion of the Definition of “Qualified Individual”
Under the original language of the CARES Act, a qualified individual included the following persons:
One topic new clients ask about is how they can resume a former name at the time they get divorced. Others were divorced but did not resume a former name at that time and ask is it too late to do so now? Still others did resume a former name but have questions about what to do next.
In New Jersey, Courts permit a Party to formally resume the use of a former name (or other surname) upon the entry of a judgment of divorce. If this is something you wish to do, it is best to advise your attorney at the outset of your case. It can then be included in your first filing with the Court whether that is a Complaint with you as the Plaintiff or in your Counterclaim with you as the Defendant.
If you are unsure as to whether to do so at the start of your case, a request can be made by your attorney at the final divorce hearing to amend/revise your pleading to permit you to do so at that time.
Karolina Dehnard, Managing Director of the International Transaction Group at Lindabury, and President of the Polish-American Chamber of Commerce in the Northeastern USA, was interviewed by Polish publication White Eagle about how the world of business has changed over the past few months and how trade relations between the United States and Poland look today. The interview is available here.
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