Taxation of estates & trusts

TOPICS / TAX

April 1, 2008

Split-Interest Prohibition Upheld

The Third Circuit Court of Appeals joined other jurisdictions in affirming IRC § 2055(e)’s prohibition of charitable deductions from an estate for transfers of interests in trust property that are not definitely divided between charitable and noncharitable beneficiaries, even where the arrangement shows little likelihood of being abusive in the

April 1, 2008

AICPA Issues Guidance for 2007 Returns on Trustee Costs

The AICPA has produced guidance for members preparing 2007 fiduciary income tax returns, in keeping with the recent holding of the U.S. Supreme Court in Knight v. Commissioner. The case (101 AFTR2d 2008-380) affirmed that investment advisory fees of estates and nongrantor trusts generally are subject to the 2% of

March 1, 2008

Dunn Does It Again

The Eleventh Circuit Court of Appeals vacated a Tax Court judgment and allowed a valuation discount of 100% of an estate’s built-in capital gains tax. The court based the contingent tax liability and resulting discount on an assumed immediate liquidation of the decedent’s interest in a closely held investment holding

January 1, 2008

Life Insurance: What’s It Worth? And Who Says?

EXECUTIVE SUMMARY Gifts of life insurance policies to not-for-profit organizations can benefit both the organization and the donor, the latter in the form of an often sizeable income tax deduction. However, under the new requirements of the Pension Protection Act of 2006 (PPA), determining the fair market value

November 1, 2007

Estate Tax Take Little Changed

Despite higher exemptions of taxable estates and far fewer returns filed, revenue collected from the estate tax slipped only slightly from 2001 to 2005, the IRS said. The number of returns fell 58%, but total estate tax revenue declined only 8% to $21.6 billion. The phenomenon indicates that estates with

November 1, 2007

Estate Tax Exemptions and Rates Over Time

October 1, 2007

“Unique” Trust Costs Exempted From Floor

The IRS and Treasury Department issued proposed regulation amendments intended to clarify how administrative expenses of estates and non-grantor trusts may be deducted. In general, such costs are considered miscellaneous itemized deductions subject to a minimum of 2% of adjusted gross income, similar to individual returns. IRC section 67(e)(1), however,

October 1, 2007

The Word on IRD

Probably for the same reason people tend to put off making their wills, taxpayers often neglect to plan for the effects on their heirs of income they were entitled to receive but didn’t live long enough to see. So-called “income in respect to a decedent” (IRD) includes,

September 1, 2007

Matching Asset Values for Income and Estate Tax

Two recent cases confirm that the income tax basis of inherited property is the same as the amount agreed upon for estate tax purposes. The Second and Ninth circuit courts of appeals held that two brothers, as heirs of their father’s estate, must use as their income tax basis the

July 1, 2007

Practice Makes Perfect

Tax practitioners have enough concerns without having to fear the specter of a professional liability claim resulting from a preventable mistake or oversight. Many of these slip-ups can be prevented by simply jotting a contemporaneous note recording the rationale for an election or flagging a filing deadline

ALSO FEATURED

5 competencies CPAs need to lead in the age of AI

Artificial intelligence cannot replicate human competencies like critical thinking, creativity, and empathy. CPAs can tap into them to develop professional leadership qualities machines can’t match. Learn how in this JofA cover article.