Daily Tax Report: State

Crypto Estate Planning • Trump’s Tax Breaks • Energy Efficiency

Jan. 25, 2020, 3:00 PM

This is a weekend roundup of Bloomberg Tax Insights, which are written by practitioners featuring expert analysis on current issues in tax practice and policy. The articles featured here represent just a handful of the many Insights published each week. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, and Daily Tax Report: International.

This week we look at estate planning for cryptoassets; President Trump’s tax breaks; energy-efficient government buildings; new EU e-commerce VAT rules; MoneyGram’s efforts to be called a bank; Brazilian tax reform; and 2020 as the year of the tax pro. We’ll hear from:

  • Margaret Scott and Jake Kaplan of Alston & Bird on estate planning considerations for cyptocurrency and related assets
  • Sean Weissbart of Blank Rome on what tax benefits might disappear if Trump isn’t re-elected
  • Ike Brannon of the Jack Kemp Foundation on using the energy-efficiency tax deduction for government buildings
  • Jan Sanders of PKF Netherlands on the new EU VAT rules for e-commerce
  • Robert Willens on MoneyGram’s second failed attempt to qualify as a bank
  • Henrique Erbolato of Santos Neto Advogados on reforming the complex Brazilian tax system
  • Scott McFarlane of Avalara on the growing role of the tax professional
Photographer: Carlos Becerra/Bloomberg

Cryptoassets are a rapidly expanding asset class for which the IRS has provided only nominal guidance regarding transfer taxes. In the first part of a two-part series, Margaret Scott and Jake Kaplan of Alston & Bird summarize the different U.S. transfer tax rules applicable to U.S. citizens and domiciliaries versus nonresident aliens with respect to cryptoassets. Read: Transfer Tax and Estate Planning Considerations for Clients With Cryptoassets (Part 1)

In second part of the series, Scott and Kaplan outline practical estate planning considerations for advisers with clients who own cryptoassets. Read: Transfer Tax and Estate-Planning Considerations for Clients With Cryptoassets (Part 2)

President Trump’s potential Democratic opponents have proposed both raising taxes and curtailing some current benefits. Sean Weissbart of Blank Rome highlights the benefits that might disappear if Trump isn’t re-elected. Read: Five Tax Benefits that Might Go Away if President Trump Is Not Re-elected

The commercial buildings energy-efficiency tax deduction under Section 179D was renewed—again—for another year in the spending bill approved by Congress and signed by President Trump on Dec. 20. Ike Brannon of the Jack Kemp Foundation illustrates how the deduction also benefits governments at all levels by increasing the energy efficiency of government buildings. Read: Positive Revenue, Economic Impact of Energy-Efficiency Tax Deduction

As of next year, new VAT rules for e-commerce apply. The changes that will take effect on Jan. 1, 2021, will have a major impact on all businesses involved. Jan Sanders of PKF Netherlands highlights the changes and discusses the practicalities for businesses selling online. Read: New VAT Rules for E-Commerce in the EU

MoneyGram tried and failed a second time to convince the U.S. Tax Court that it was a bank. Thus the company still can’t claim a bad-debt deduction from its losses on asset-backed securities in the late 2000s. Robert Willens looks at MoneyGram’s arguments and how the Tax Court, at a federal appeals court’s bidding, found additional reasons to rule that the money transfer company wasn’t a bank. Read: MoneyGram’s Bank Aspirations Are Dashed

The Brazilian tax system is highly complex, but reforms are now being proposed at a constitutional and legal level. Henrique Erbolato of Santos Neto Advogados, Brazil, looks at the legal framework for reforms and the measures being proposed to simplify and modernize the tax system. Read: Brazilian Tax Reform—Framework and What to Expect

The digitized economy requires today’s tax professionals to adapt to the changing ways their clients and employers do business. Scott McFarlane of Avalara looks at the increasing importance of the tax department and how to keep up with the changes brought by globalization and digitization. Read: 2020 Will Be the Year of the Global Tax Professional—And Rightfully So

From the Archive

The typical cryptocurrency trader might be living in the moment, but Bloomberg Tax contributors are looking into the future for those traders and their heirs.

Traditional estate planning and administration must be revised and adapted to the digital age. Michelle Gitlitz of Crowell & Moring LLP, Mark Shayne of Empire Valuation Consultants LLC, Sean Weissbart of Blank Rome LLP, and Jennifer Zegel of Kleinbard LLC walked through how to include digital assets in an estate plan and what can be done when the holder of such assets dies without making any provisions.

Linda DelaCourt Summers of Ulmer & Berne explained digital assets, digital access, the difference between them, and why both need to be considered in estate planning.

Beyond Tax

What’s happening outside the world of tax?

Many states have passed or proposed sports betting legislation, and 2020 will see this trend continue, Cadwalader attorneys say. They discuss this rapidly expanding industry and predict that the stage is set for legal sports betting’s popularity to surge in 2020. Read: America Will Double Down on Sports Betting in 2020

It’s time to deploy the tools and skills we’ve forged in the fires of capitalism to help solve the challenges it has helped create. The legal profession provides a model, writes Samir A. Gandhi, managing partner at Sidley Austin LLP. Read: Pro Bono Work as a Model—Capitalism Can Save Itself by Saving America

Exclusive Content for Bloomberg Tax Subscribers

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Promissory notes are widely used to transfer money or other assets between family members and family entities for many reasons. Michael S. Strauss of Strauss Malk & Feder LLP and Jerome M. Hesch of Boston University School of Law and the Florida International University Law School analyze the valuation of intrafamily notes for transfer tax purposes.

Bloomberg Tax Insights articles are written by experienced practitioners, academics, and policy experts discussing developments and current issues in taxation. To contribute please contact Erin McManus at emcmanus@bloombergtax.com.

To contact the reporter on this story: Erin McManus in Washington at emcmanus@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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