News from AVZ

June 2011

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In City Often?

Tax Man Asks Some for Tally

By Cara Buckley

The New York Times

Dear Friend,

One couple, in a spirited attempt to claim that they were not subject to $41,000 in New York city income taxes, contended that their million-dollar Manhattan apartment was little more than "a hotel substitute" and that their "historic roots" were on Long Island, where they kept a yacht and a 3,500-square-foot home.

A husband and wife with an Upper East Side co-op who were facing over $270,000 in income tax penalties presented affidavits from managers at their regular hardware and wine shops in Connecticut, hoping to prove that they did not live in the city.

Yet another couple noted the devotion, time and money -- $470,000 - that the wife had lavished on her garden in East Hampton, "which provided her with a great deal of solace"; it was evidence, they said, that they spent most of their time outside the city and that therefore they did not owe it $25,500.

The well-to-do with more than one home should be warned: it is the equivalent of sending a come-hither look to the tax man. And, as each of these unfortunates learned, pledging allegiance to the East End or the Constitution State will not save you from a very large bill.

Under longstanding rules, a person who spends more than half the year and maintains a home in New York City is taxed as a city resident. But this year, the state tax department, which collects both state and city income taxes, is adding a new line to 2010 tax forms, asking state residents who own second, or perhaps third and fourth, homes to specify how many days they spent in New York City. A number nearing 183 will be a red flag.

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James O'Connor, Esq.

Accredited Estate Planner

J O'Connor headshot

Article

Jim O'Connor recently received the National Association of Estate Planners and Councils esteemed Accredited Estate Planner (AEP) designation. This graduate level specialization recognizes him as an educated, knowledgeable, experienced and ethical professional in the field of estate planning.

Jim graduated with honors from Hofstra University and began his professional career with the Internal Revenue Service. He obtained his Juris Doctor degree from Brooklyn Law and his Master of Laws Degree in Taxation from New York University.

Click here to see Jim's bio

Tiger 21 "Carefrontation"

Money Tips From Self-Made Millionaires

By Paul Sullivan

The New York Times

Spending the afternoon in a Manhattan town house with eight wealthy men who are all members of an investment club called Tiger 21. I was there to hear an unvarnished critique of how my wife and I save, spend and think about money.

Each of the 180 members of Tiger 21 has a net worth of at least $10 million, pays $30,000 in annual membership fees and commits to spending one day a month with other members. Nearly all of them made their money - they didn't inherit it - and most are men.

I had asked to sit in on one of the group's signature sessions, the portfolio defense, but a few weeks ago, the members invited me to be in the hot seat. I jumped at the chance. Beyond looking at how money is invested, the portfolio defense is intended to force members to discuss their wealth in the broadest terms.

I had heard horror stories. One member was told he needed to lose a lot of weight if he was going to get people to invest in his new fund. Another was chastised for telling his children that he had lost his money in the financial crash so that he would not have to talk to them about his immense wealth.

Michael Sonnenfeldt, the founder of Tiger 21, used the term "carefrontation" to describe what happens in a portfolio defense. The assessments are meant to be direct, unsettling and possibly painful to hear, Mr. Sonnenfeldt told me. But the goal is to get members to think differently about what they are doing with their investments and about everything in their lives that is affected by their wealth, from their family to charities.

"It's not meant for the faint-hearted," Mr. Sonnenfeldt said. "This is a process that some people could clearly find offensive or discomforting."

What I experienced was rough, but it was also thought-provoking. The value to me - and to anyone given a similar opportunity - was that the members challenged everything about my assumptions on saving and spending. Here's some of what I took away.

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Ale Headlin Fourth of July

Did You Know . . .

Held since 1785, the Bristol Fourth of July Parade in Bristol, Rhode Island is the oldest continuous Independence Day celebration in the United States.
Since 1912, the Rebild Society, a Danish-American friendship organization, has held a July 4^th weekend festival that serves as a homecoming for Danish-Americans in the Rebild section of Denmark.
Since 1916, Nathan's Hot Dog Eating Contest in Coney Island, Brooklyn, New York City supposedly started as a way to settle a dispute among four immigrants as to who was the most patriotic.
Since 1959, the International Freedom Festival is jointly held in Detroit, Michigan and Windsor, Ontario during the last week of June each year as a mutual celebration of Independence Day and Canada Day (July 1). It culminates in a large fireworks display over the Detroit River.
Numerous major and minor league baseball games are played on Independence Day.
The famous Macy's fireworks display usually held over the East River in New York City has been televised nationwide on NBC since 1976. In 2009, the fireworks display was returned to the Hudson River for the first time since 2000 to commemorate the 400th anniversary of Henry Hudson's exploration of that river.
Since 1970, the annual 10 kilometer Peachtree Road Race is held in Atlanta, Georgia.
The Boston Pops Orchestra has hosted a music and fireworks show over the Charles River Esplanade called the "Boston Pops Fireworks Spectacular" annually since 1973. The event was broadcast nationally from 1987 until 2002 on the A&E Network, and has aired since 2003 on CBS.