New Jersey Homestead Benefit Update

New Jersey Homestead Benefit Update

The New Jersey Homestead Benefit is a credit available to taxpayers owning a home who are 65 years of age or older or disabled. This taxpayer benefit has been available for many years and is based on a percentage of the property tax paid a few years prior to submission of the application. For example, if a taxpayer was deemed eligible, the most recent credit, the 2014 Homestead Benefit, was calculated based on the property taxes paid on a personal residence in 2006. In general, the Homestead credit is calculated based on the taxpayer’s New Jersey gross income, filings status, and age/disability status.

On July 13, 2017 the state of New Jersey has advised all participants in this program that this credit will now appear as a reduction on the property tax bill versus a check sent in the mail. Going forward an eligible taxpayer for a 2014 Homestead benefit calculated above should see the credit as a reduction of the May 2017 property taxes. If a taxpayer is expecting a credit and does not see it on their bill they should contact their local tax office.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Taxation of Ethereum Mining (and Other Cryptocurrencies)

Taxation of Ethereum Mining and Other Cryptocurrencies

A recent resurgence in cryptocurrency mining, particularly that of Ethereum, has sparked a new wave of questions regarding the taxability of the mining proceeds. Mining refers to the computational processes performed by computer hardware to validate all of the transactions on Ethereum’s blockchain. Miners are crucial to the integrity, maintenance, and continuation of the blockchain. As a reward for the mining services participants receive units of cryptocurrency. Taxpayers who receive Ethereum and other cryptocurrencies in such a way are subject to income tax. Whenever a Taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income.

Example:

  • A Taxpayer successfully mines 0.10 Ethereum on June 15, 2017.
  • On June 15, 2017 the conversion rate between USD and Ethereum was $344.00 for 1.0 Ethereum.
  • The Taxpayer would have to include $34.40 as ordinary gross income.

The implications extend beyond gross income as Taxpayers can create scenarios under which the income is also subject to self-employment income. In these scenarios Taxpayers’ activities rise to that of a trade or business. Planning opportunities exist for Taxpayers to minimize the tax implications of mining with reasonable expenses, depreciation, and other cost recovery methods.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

An Introduction to Blockchain Technology and Digital Currency Taxation

An Introduction to Blockchain Technology and Digital Currency Taxation

The benefits of blockchain technology have been described as potentially revolutionary and may eventually impact virtually every industry. At its core, a blockchain is a decentralized, shared database that serves as a digital record of transactions. The decentralized nature of a blockchain means that it is immune from manipulation and therefore allows for transactions to occur without third-party verification. The hope is that this will drastically reduce transaction costs across industries.

The origin of blockchain technology dates to 2008 with the advent of the digital currency (also referred to as cryptocurrency), Bitcoin. Presently, there are approximately 900 different digital currencies which can be obtained in various ways, most commonly through a computing process called “mining” or by purchase on a digital currency exchange.

IRS Notice 2014-21 clearly defines digital currency as property for federal tax purposes. Therefore, for those who have participated in the digital currency market must take care to account and record keep for their transactions which have the potential to impact income tax liability. For this reason, it is important to discuss with a tax professional the implications of mining and trading digital currency to ensure the appropriate level of compliance in order to avoid the underpayment tax and exposure to penalties.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

New Jersey Executor/Executrix Corpus Commissions

New Jersey Executor Executrix Corpus Commissions

Being named an executor (or executrix) of an estate holds many responsibilities and duties, such as collection, distribution/disposition, safeguarding of estate assets, payment of estate debts, filing of tax returns, and so on. Due to the complexity of these responsibilities, under the New Jersey Statute 3B: 18-14, an executor of an estate is entitled to a corpus commission for their duties. This commission applies to all assets that flow through the probate estate. In other words, assets that have a predefined/named beneficiary (other than the estate), such as life insurance, IRAs, 401(k)s, joint tenants with rights of survivorship or payable on death assets, certain trusts, or other non-probate assets will not be included in the commission calculation.


The corpus commission calculation for New Jersey may be taken against all applicable corpus as follows: 5% of the first $200,000, 3.5% on the excess of $200,000 up to $1,000,000, and 2% on the excess over $1,000,000. An executor has the option to take or decline the corpus commission. If taken, this commission would potentially be a deduction on the estate returns, but must also be included in income on the executor’s personal income tax returns.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

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