The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act) (PL 111-312) revised tax law for estates of decedents dying in 2010, 2011 or 2012. The new rules apply for 2010 unless an executor elects to use prior law. Elections for 2010 decedents can
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TOPICS / TAX
Taxation of estates & trusts
IRS Releases 2010 Gift Tax Return
The IRS on Friday released the final 2010 version of Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. The updated form reflects changes made by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (PL 111-312), which was enacted Dec. 17, 2010.
IRS Starts Accepting Delayed Returns
The IRS on Tuesday announced that it has started accepting returns that it could not accept before because it was updating forms and reprogramming its systems (IR-2011-16). In December, the IRS informed taxpayers that because of the Dec. 17 enactment date of the Tax Relief, Unemployment Insurance Reauthorization, and Job
Tax Season Brings New Twists
While 2010 featured an ample number of new tax breaks and revenue-raising measures, the filing season that starts this month (with an April 18 deadline for individual returns) is notable for tax practitioners also because of its new return preparer requirements. For the first time, paid return preparers including CPAs
Congress Enacts Tax Cut Extensions
Congress in December sent to President Barack Obama for his signature the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, HR 4853, which postpones the sunset of the 2001 and 2003 tax cuts, temporarily reduces the estate tax and extends a number of expired provisions. It also
Congressional Hot Tax Topics
This page tracks developments in five hot tax topics affecting taxpayers in 2010 and 2011 that Congress has had under consideration. On Dec. 17, President Barack Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR 4853), which deals with four of the
Tax Cut Extension Enacted
The House of Representatives on Thursday by a vote of 277–148 passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, HR 4853, which postpones the sunset of the 2001 and 2003 tax cuts, reduces the estate tax, extends a large number of expired provisions, and extends
Senate Approves Tax Cut Extender Bill
On Wednesday, the Senate voted 81–19 in favor of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Senate Amendment 4753 to HR 4853, which would postpone the sunset of the 2001 and 2003 tax cuts, reduce the estate tax, extend a large number of expired provisions,
Provisions in the Senate’s Tax Cut Extension Bill
Senate Majority Leader Harry Reid, D-Nev., introduced legislation late Thursday that would postpone the sunset of the 2001 and 2003 tax cuts, reduce the estate tax, and extend a number of expired provisions, as well as extending unemployment benefits. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of
Estate Must Reduce Its Credit for Tax on Prior Transfers
The Tax Court upheld the government’s reduction of a widow’s estate tax credit for tax on prior transfers due to property included in her estate previously transferred from her late husband’s estate. The court held that the limitations of IRC §§ 2013(b) and 2013(c) applied to the credit; that the
Income Tax Accounting for Trusts and Estates
Estates and nongrantor trusts must file income tax returns just as individuals do, but with some important differences. For one, their income is taxed at either the entity or beneficiary level depending on whether it is allocated to principal or allocated to distributable income, and whether it is distributed to
New Life for Charitable Lids
One common estate planning technique the IRS has opposed or blocked for years is “charitable lid planning.” This technique relies on “defined value” and “value adjustment” clauses or similar provisions in wills, deeds or other transfer documents to cap the transfer taxes on estates, gifts or generation-skipping trusts at some
Step Transaction Doctrine Collapses LLC Interest Gifts
In a second decision (Pierre II) involving Suzanne Pierre’s transfer of a single-member limited liability company (LLC) interest to two trusts, the Tax Court applied the step transaction doctrine to the gift and sale transactions at issue in the case and slightly reduced the lack-of-control discount. Previously, the court had
Request for Replacement Estate Tax Check Denied
The U.S. Court of Federal Claims held it did not have jurisdiction to issue a replacement check to a U.S. executor after a foreign executor named to the same estate cashed a refund check from the IRS. The issue arose after a U.S. citizen died in 2006 while living in
“Bundled” Fiduciary Fees Fully Deductible for 2009
The IRS in Notice 2010-32 extended to tax years beginning in 2009 its interim guidance on deductibility of a “bundled” investment advisory commission or fee paid to a trustee or executor on behalf of a nongrantor trust or estate. The interim guidance was issued in February 2008 in Notice 2008-32
Life Insurance Checkup
Life insurance policies often form a large percentage of a client’s net worth. As goals, needs and products evolve, advisers should review their clients’ insurance portfolio to make sure it is optimized. Follow these steps to get started: —By Cory Chmelka, CFP, (cchmelka@capwm.com) managing partner of Capstone Wealth Management LLC
Gift Tax on QTIP Transfer Included in Gross Estate
The Tax Court agreed with the IRS that gift tax of approximately $10 million resulting from the gift of qualified terminable interest property (QTIP) by a decedent within three years before her death was includible in her gross estate under IRC § 2035(b). Even though the gift tax on the
FLP Affirmed by Tax Court
The Tax Court held that although a family limited partnership (FLP) conducted no active trade or business, it nonetheless fulfilled a legitimate and significant nontax purpose. Thus, a discounted value of an interest in the FLP, rather than that of stock with which it was funded, was includible in a
Charitable Deduction Due to a Partial Disclaimer
The Eighth Circuit upheld the Tax Court’s decision to allow a charitable deduction involving a disclaimer by an heir of a portion of her interest in an estate. The Tax Court had held the disclaimer was not qualified under IRC § 2518 with respect to property that passed to a
IRS Issues Guidance on Gift Tax Consequences of Transfers in Trust
The IRS on Tuesday clarified for taxpayers that despite the provisions of IRC § 2511(c), the gift tax continues to apply to certain transfers to a wholly owned grantor trust (Notice 2010-19). Some taxpayers had interpreted section 2511(c) to exclude from gift tax all transfers in trust where the trust
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