Wealth planning with these often highly advantageous tools must be weighed against possible drawbacks of income tax accounting.
Taxation of estates and trusts
The IRS spelled out the procedures same-sex married couples should use to recalculate the transfer-tax treatment for property transferred to spouses before the U.S. Supreme Court invalidated Section 3 of the Defense of Marriage Act.,
The Tax Court finds a sufficient nexus between the Ponzi scheme theft loss suffered by an LLC and the value of the estate's interest in the LLC.
The IRS aims to close a 'loophole' of lapsing rights and restrictions in transfers of family-owned businesses.
The IRS issued its annual revenue procedure containing inflation-adjusted amounts for the 2017 tax year, affecting over 50 Code provisions, as well as the new tax rate tables for individuals and estates and trusts.
The IRS removed a prohibition on making a qualified terminable interest property (QTIP) election when the election would have been null and void because the estate had a zero estate tax liability.
The new law imposes a potentially elaborate reporting regime for values of estate property and ominous consequences for failures.
Charitable deductions stand a much better chance of being upheld when taxpayers closely follow the qualified appraiser rules.
The IRS announced one last postponement in the due date for filing under rules requiring reporting of the value of an estate’s assets to the IRS and beneficiaries.
Many charitable organizations will not accept a gift of an LLC or limited partnership units because the entity’s business is not part of their charitable mission.
The regulations reiterate the delayed reporting deadline of March 31, 2016.
Sumner Redstone’s 1972 transfer to children’s trusts, unlike his brother’s, was voluntary and nonbusiness-related.
State law theories of liability were not proved, the Tax Court holds.
The IRS further postponed the due date for the new reporting requirement, under which estates must report the value of estate assets to the IRS and to beneficiaries.
The 1972 transfer was in the ordinary course of business and for full and adequate consideration, the Tax Court holds.
A net gift calculation is accepted under the willing buyer/seller test.
The highest gift or estate tax rate applies after the gift tax annual exclusion amount; the marital deduction and QTIPs are among the possible exclusions.
The remainder interest must be calculated assuming annual distribution amounts equal to the greater of 5% or the fixed percentage stated in the trust instrument.
Gift or estate valuation of interests may be significantly higher, incurring more tax.
The IRS issued the annual inflation adjustments for 2016 for more than 50 tax provisions as well as the 2016 tax rate tables for individuals and estates and trusts.