On June 21, 2019, the United States Supreme Court decided North Carolina Dept. of Revenue v. Kimberly Rice Kaestner 1992 Family Trust (hereinafter, “Kaestner”). In a unanimous opinion delivered by Justice Sotomayor, the Court held that under the Fourteenth Amendment’s Due Process Clause, a state may
Mitchell M. Gaswirth is a partner in the Tax Department. His practice focuses primarily on income, gift and estate tax and related business planning. Mitchell counsels individuals, entrepreneurs and business entities in connection with the myriad income and other tax issues arising in sophisticated business transactions.
Mitchell’s practice also encompasses a wide array of merger and acquisition, business formation and financing, debt restructuring, and real property acquisition, disposition and exchange transactions. His knowledge encompasses the complex and often arcane application of California’s property tax regime (“Proposition 13”) in a variety of business transactions directly or indirectly involving California real property.
In addition, he provides income, gift and estate tax and related business planning advice to individuals, families, and their business enterprises to help them achieve wealth preservation and tax minimization objectives. This planning includes tax minimization strategies involving grantor trusts, family limited partnerships, charitable and family “split interest” and other irrevocable trusts, and other sophisticated wealth transfer and business succession vehicles. Mitchell’s wealth transfer tax planning practice focuses particularly on counseling executives, professionals, investors, and others concerning the preservation, administration and disposition of their capital. He also counsels individuals and businesses in connection with planning to minimize California income tax burdens.
Mitchell also represents corporate and individual fiduciaries, and estate and trust beneficiaries, in a wide array of sophisticated personal planning and fiduciary administration matters, including representing U.S. Trust, JPMorgan Chase Bank and Wells Fargo Bank, in their administrations of complex trust arrangements for high net worth families. His fiduciary practice also encompasses substantial “Family Office” representation for multi-member families seeking to achieve complex and sophisticated income and wealth transfer tax objectives.
Mitchell’s tax practice also involves the administrative and judicial resolution of tax disputes with federal and state tax authorities. He represents taxpayers in income, estate and gift, sales and use, property, and employment tax disputes with the Internal Revenue Service, California Franchise Tax Board, and other tax authorities. Notably, Mitchell served as Lead Tax Counsel to the late Paul Newman, both at trial and in the California Court of Appeals, in the actor’s successful refund suit against the California Franchise Tax Board. The Newman case established the impropriety of the Franchise Tax Board’s formula for apportioning to California a non-resident entertainer’s income derived from both California and non-California sources.
Prior to joining Proskauer, Mitchell was a partner of the Los Angeles law firm Mitchell, Silberberg & Knupp.
On January 18, 2019, the U.S. Department of Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) released final regulations (the “Final Regulations”) regarding the “passthrough deduction” for qualified trade or business income under section 199A of the Internal Revenue Code. The Final Regulations modify proposed regulations (the “Proposed Regulations”) that were released in August 2018. The Final Regulations apply to tax years ending after February 8, 2019, but taxpayers may rely on the Proposed Regulations for taxable years ending in calendar year 2018.
Section 199A was enacted in 2017 as part of the tax reform act. Generally, section 199A provides a deduction (the “passthrough deduction”) of up to 20% for individuals and certain trusts and estates of certain of the income from certain trades or businesses that are operated as a sole proprietorship, or through certain passthrough entities. The passthrough deduction provides a maximum effective rate of 29.6%.
This post provides background and summarizes some of the most important changes from the Proposed Regulations to the Final Regulations. For more information, please contact any of the Proskauer tax lawyers listed on this post or your regular Proskauer contact.
The Tax Cuts and Jobs Act enacted section 1400Z-2 of the Internal Revenue Code, which created the qualified opportunity zone program. The program is designed to encourage investment in distressed communities designated as “qualified opportunity zones” by providing tax incentives to invest in “qualified opportunity funds” (“opportunity funds”) that, in…