The IRS issued guidance delaying the due date for compliance with the recently enacted rules that require consistent basis reporting between an estate and anyone acquiring property from the estate.
Taxation of estates and trusts
The highway funding bill made changes to the Internal Revenue Code that affect estates and beneficiaries, including new reporting rules.
Carryover basis election for estates electing out of estate tax requires special adjustments.
Annual exclusions were available for gifts to a family trust that qualified as a Crummey trust.
Planning to lessen estate, gift, and generation-skipping transfer taxes increasingly requires considering clients’ foreign connections.
The IRS issued final regulations on the portability of deceased spouses’ unused estate tax exemption amounts, which allows surviving spouses to use unused amounts of exemption from the estate tax in addition to their own exemptions.
The IRS issued proposed regulations to amend various regulation sections to take into account special rules that affect the basis of assets acquired from a decedent who died in 2010 and for which an executor made a Sec. 1022 election.
The AICPA sent a letter to the IRS on recommending ways to make it easier for surviving spouses to elect portability of the deceased spouse’s unused estate tax exemption.
State law is applied to determine whether a transferee is liable for a transferor’s tax liability. The Tax Court held that four trusts were not required to pay their former personal holding company’s tax liability. Virginia state law does not contain a corollary to the federal substance-over-form doctrine, and federal
Controversial rules prompted by the Knight decision parse certain income tax deductions of estates and trusts. The IRS issued final regulations on the controversial question of which costs incurred by trusts and estates are subject to the 2% floor on miscellaneous itemized deductions under Sec. 67(a). The regulations apply to
The IRS issued final regulations on the controversial question of which costs incurred by trust and estates are subject to the 2% floor on miscellaneous deductions under Sec. 67(a) (T.D. 9664). The regulations will apply to tax years beginning on or after May 9, 2014. The final regulations retain from
The American Taxpayer Relief Act of 2012 raised the top income tax rate to 39.6%, and a new 3.8% tax on net investment income also applies beginning in 2013. Both taxes apply to trusts and estates with income in excess of $11,950 in 2013, in contrast to much higher thresholds for individuals. This new tax regime necessitates drafting wills and trusts to give executors and trustees maximum discretion so they can reduce these taxes.
Sometimes after clients create an irrevocable trust, circumstances change and the trust needs to be amended to reflect those changes. Sometimes these changes are related to family events, such as the marriage, divorce, or even death of the beneficiary; sometimes the client wants a new fiduciary or to have the
The IRS on Monday offered certain executors a simplified way to request an extension of time to make the “portability” election to transfer a deceased spouse’s unused estate tax exclusion to the surviving spouse (Rev. Proc. 2014-18). Executors of estates of spouses who died in 2011, 2012, or 2013 and
The Tax Court held that the duty-of-consistency doctrine prevented two taxpayers from using fair market value (FMV) as the basis of inherited property where the estate had previously valued the property using the special valuation election of Sec. 2032A. The value of property included in a decedent’s estate is its
The Tax Court held that a gift’s fair market value (FMV) may be determined with reference to the recipient’s assumption of the potential Sec. 2035(b) estate tax liability, abandoning its precedent from McCord, 120 T.C. 358 (2003). Jean Steinberg, who was 89, entered into a binding agreement with her four
On Dec. 2, the Treasury Department issued final regulations addressing the 3.8% net investment income tax under Sec. 1411 (T.D. 9644). Regs. Sec. 1.1411-3 addresses estates and trusts, including charitable remainder trusts (CRTs). The final regulations include an additional accounting method to tax CRT distributions. Distributions of income from a
A district court held that an estate’s remittance to the IRS was a tax payment rather than a deposit. It denied the estate’s refund request because it occurred after the three-year recovery period had expired. Generally, a taxpayer must request a refund of a tax overpayment within three years from
Holding that there was a genuine issue of material fact, the Tax Court on Monday denied an IRS motion for summary judgment in an estate and gift tax case where the 89-year-old taxpayer, Jean Steinberg, made gifts to her daughters while requiring them to pay any tax liability that would
In the wake of the Supreme Court’s Windsor decision invalidating a portion of the Defense of Marriage Act (DOMA), the Treasury Department and IRS announced on Thursday that “same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.” The IRS also