When the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, PL 107-16) was enacted in 2001, almost no one seriously thought that one of its most important provisions would ever be given its full effect—the repeal of the federal estate and generation-skipping transfer (GST) taxes in 2010. However,
Advertisement
TOPICS / TAX
Taxation of estates & trusts
Numerous Tax Provisions Expired at End of 2009
The ringing in of the new year at midnight on Dec. 31 also signaled the expiration of several tax provisions. The biggest was the estate and generation-skipping tax regime, which is repealed for 2010. Various bills have been introduced that would revive the estate tax in its 2009 form, but
Line Items
SINGLE-EMPLOYER DEFINED BENEFIT PLANS GET GUIDANCE The IRS issued final regulations to provide guidance on funding requirements affecting single-employer defined benefit pension plan sponsors, administrators, participants and beneficiaries. The regulations in TD 9467 concern (1) the determination of the value of plan assets and benefit liabilities for purposes of the
Post-Mortem Tax Lien Is Valid
The IRS may recover a 100% IRC § 6672 trust fund penalty from any responsible person who acts willfully in failing to pay over to the government taxes withheld from employees. If the responsible person dies after the assessment but before the penalty is paid, the Tax Court held, a
Underlying Assets Not Gift Tax Value of Interest in N.Y. LLC
In a taxpayer-friendly ruling, the Tax Court has held that a transfer of interest in a single-member limited liability company (LLC) should be valued for gift tax purposes as a transfer of an interest in the LLC rather than a transfer of its underlying assets. In 2000, Suzanne Pierre organized
The Generation-Skipping Transfer Tax: A Quick Guide
Sooner or later, every estate planner comes face to face with the generation-skipping transfer tax (GSTT). Many practitioners do not feel up to the challenge because this particular tax has a reputation for being as treacherous as the sea. But after you boil down all the complications, you’re left with
Gifting Shares of Stock in a Closely Held Business
With the current economic downturn causing dislocations and struggles for businesses of all sizes, family-owned businesses may find their values diminished along with their immediate prospects. But with these challenges come opportunities for succession planning. Because closely held businesses may now be worth less than formerly, this might be a
Charting a Course: Estate Planning 2009–2011
This special report is published as a supplement to the July 2009 issue of The Tax Adviser. It looks at the status of estate, gift, and generation-skipping transfer taxes over the next few years.1 Current State of the Law In 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation
Valuation Discounts for Estate and Gift Taxes
One purpose of fixing a value on an interest in a closely held business is to determine gift and estate tax liability. CPAs called upon to provide such valuations know that this can be a painstaking task. It is not an exact science but an educated estimate when, as often
IRS Issues Proposed Regs on Graduated Retained Interests Under Sec. 2036
The IRS issued proposed regulations Thursday providing guidance on the portion of trust property includible in the grantor’s gross estate if the grantor has retained certain interests in the property (REG-119532-08). The retained interests covered include the use of the property and the right to an annuity, unitrust, graduated retained
Bill Would Limit Family Limited Partnership Discounts
In January, Rep. Earl Pomeroy, D-N.D., introduced HR 436, Certain Estate Tax Relief Act of 2009, which has been referred to the House Ways and Means Committee. The bill would continue the federal estate tax exemption at $3,500,000, and set the tax rate for estates exceeding that amount at 45%
Guidance Issued on Dividing CRTs, Assiting Divorcing Couples and Squabbling Annuitants
The IRS has issued Revenue Ruling 2008-41 confirming that charitable remainder trusts (CRTs) can be divided into separate but equal trusts for each recipient without adverse tax consequences. If properly divided, the separate trusts will continue to qualify as CRTs, and no private foundation termination excise taxes will apply under
Intentionally Defective Grantor Trusts
Estate tax planners have long employed intentionally defective grantor trusts to freeze the value of an asset for estate tax purposes while transferring assets out of the estate free of gift tax. An intentionally defective grantor trust (IDGT) is a complete transfer to a trust for transfer tax purposes but
IRS Appeals Jelke to Supreme Court
The government asked the U.S. Supreme Court to review the Eleventh Circuit’s decision in Estate of Frazier Jelke III v. Commissioner (100 AFTR2d 2007-6694, “Tax Matters: Dunn Does It Again,” JofA, March 08, page 70). The Eleventh Circuit previously declined to rehear en banc its decision overruling the Tax Court
FLPs Revisited
The Tax Court ruled, contrary to the IRS’s argument, that the step transaction doctrine did not apply where gifts of interests in a family limited partnership (FLP) were made only six days after the funding of the partnership with stock. However, the court also partially denied the taxpayers’ discounts for
Cook Won’t Excuse Estate From Table
Despite contrary holdings by other circuits, the Fifth Circuit recently held fast to its earlier decision in Cook v. Commissioner to once again overrule an estate’s discounting of an annuity interest and restrict it to the valuation tables prescribed by IRC § 7520. The decedent in the recent decision, James
All Bundled Up
In the wake of the Supreme Court’s decision in Knight v. Commissioner (101 AFTR2d 2008-380), the IRS permitted full deduction of “bundled” commissions or fees paid to a trustee or executor of a nongrantor trust or estate for tax years 2007 and previously without parsing portions that qualify for “above
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
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
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
Features
FROM THIS MONTH'S ISSUE
Building a better CPA firm: Stepping up service offerings
A key step in business model modernization is determining how to implement services that satisfy clients and employees.
From The Tax Adviser
August 30, 2025
2025 tax software survey
July 31, 2025
