The Bloomberg BNA Estate Tax Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues. The ideas presented here are those of individuals and Bloomberg BNA bears no responsibility for the appropriateness or accuracy of the communications between group members.
October 4, 2013
For a second year, Bloomberg BNA has released projected inflation-adjusted amounts for thresholds, limits and deductions in 2014. The projections affect inflation-adjusted amounts relating to estates, gifts and trusts, as well exempt organizations.
September 26, 2013
Over the past few years there have been a significant number of audits and Tax Court cases related to conservation (facade) easements, and particularly the valuation of these easements...
September 10, 2013
by John M. Fusco III
Generally, for income tax purposes, the character of income that is distributed to the beneficiary of a charitable remainder trust (CRT) as an annuity or unitrust payment is preserved....
September 1, 2013
Private placement life insurance and Private Placement Variable Annuities have become significant estate planning tools to high-net-worth individuals. In consulting with their high-net-worth clients, tax advisors need to look beyond their client's estate planning needs and look to the client's investment, income tax and asset security needs as well. Portfolio 870-1st explores the use of these financial instruments in the estate planning context.
August 30, 2013
In Rev. Rul. 2013-17, the IRS finally provides guidance on the choice-of-law issues left unresolved by the Supreme Court's decision in United States v. Windsor. In general, same-sex couples who are married in states which recognize same-sex marriage will be considered "married" for federal tax purpose, regardless of their state of domicile. While same-sex married couples residing in states that ban same-sex marriages have some certainty in the short term, it is doubtful that this will be the last word on this issue.
August 26, 2013
Bloomberg BNA, launched a major expansion of its state tax product offerings. Included in these offerings are an Estates, Gifts, and Trusts Navigator as well as a State Trust Nexus Evaluator Tool which will allow subscribers the ability to create charts comparing and contrasting different states' laws on the income taxation of estates and trusts. These tools are compliments to our Portfolios, including new Port. 869, State Income Taxation of Trusts by Richard W. Nenno. At a time when state taxes continue to grow in complexity and importance, Bloomberg BNA has added must-haves for all estate and trust advisers.
In conjunction with the release of the State Trust Nexus Evaluator, Bloomberg BNA releases Portfolio 869-1st: State Income Taxation of Trusts by Richard W. Nenno. This Portfolio goes beyond the generic state rules on the taxation of trusts by discussing unique planning opportunities and the due diligence required of all trustees. According to the author, it is important for the trustee to be involved with the planning process, implementing the trust, and performing due diligence once the trust has been established. During each phase, the trustee should ensure that the attorney is considering where the trust might be subject to tax and whether it is possible to legally avoid tax in certain jurisdictions, Nenno said. According to Mr. Nenno, "With planning, you can save a lot of money,"
August 16, 2013
The IRS released final, temporary, and proposed regulations under §4959 for excise tax on charitable hospitals that fail to meet the community health needs assessment (CHNA) requirements under §501(r)(3). These organizations must file Form 4720 by the 15th day of the fifth month after the end of the organization's taxable year in which the liability was incurred.
August 8, 2013
On August 7, 2013, the IRS issued 2013 draft Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, which is based solely on its proposed regulations under §1411 (which taxpayers may rely on for the 2013 tax year). Once the IRS finalizes the form, individuals, estates, and trusts will use it to compute their net investment income tax.
July 30, 2013
BBNA App allows subscribers to access BBNA content anywhere and everywhere.
July 18, 2013
Where donor received a "side letter" which stated that his donation of a conservation easement would be returned in the event that his donation was later deemed to be nondeductible, Tax Court held that the donation was nondeductible because the possibility that the contribution would be returned to donor was "not so remote as to be negligible."
March 5, 2013
Practitioner's should be careful when advising clients with respect to filing and payment deadlines for estate taxes. Because of the ability to extend payment deadlines in the estate tax arena, practitioners should be careful to distinguish between advise they would give to income tax clients and advise that they would give to estate tax clients.
January 15, 2013
Valuing a facade easement is not easy, to say the least. It often boils down to a battle of the experts. However, both sides should make sure to not lose sight of the forest through the trees. Sometimes a common sense approach might be the way to go without needing to resort to a complicated state law analysis. Also, both sides should be careful not to get too greedy. When a court loses confidence in one aspect of an expert's analysis, the court could dismiss everything else the expert has to say. So, both sides should take care to pick an expert wisely.
October 2, 2012
Bloomberg BNA Tax Policy and Practice Summit “Taxmaggeden,” new reporting requirements under “Obamacare,” and competing tax reform initiatives are just some of the uncertainties or “what ifs” that await corporate tax professionals after the November elections.After the elections, many of these “what ifs” are likely to take on even greater urgency and be replaced with “what now” as tax professionals must develop strategies for 2013 and beyond. The Bloomberg BNA Tax Policy and Practice Summit on Nov. 13-14, at the Ritz-Carlton Hotel in Washington, DC will bring the “what now” into sharper focus.
July 12, 2012
Tax Court denies charitable contribution deduction for donations of home to local fire departments for training and demolition purposes.
June 19, 2012
On June 15th, the IRS issued long-awaited temporary and proposed regulations that provide guidance on the estate and gift tax applicable exclusion amount, including the requirements for electing...
June 11, 2012
As you probably know, Congress passed the Defense of Marriage Act (DOMA) in 1996. In recent years, the two main provisions of DOMA have been challenged in the courts as being unconstitutional.
April 27, 2012
On April 19th and 20th, Georgetown Law hosted its annual conference, “Representing & Managing Tax-Exempt Organizations.” The conference is regularly attended by leading attorneys, accountants and managers of nonprofits. The speakers at this year’s conference included representatives from the IRS and Capitol Hill, as well as leading law firms and nonprofit organizations.
April 26, 2012
Lois Lerner, Director of the IRS Exempt Organizations Division, opened the Georgetown Law “Representing and Managing Tax-Exempt Organizations” conference on April 19th with a thorough overview of things to come.
April 3, 2012
The March 26, 2012 Tax Court decision in Wandry v. Comr., T.C. Memo 2012-88, was yet another win for taxpayers in a long-simmering dispute between taxpayers and the IRS on the issue of defined value gifts. In 2004, the Wandrys entered into a tax attorney-advised gifting plan by which they were to give interest, based on specific dollar amounts rather than percentages, in an LLC to their children and grandchildren.
March 9, 2012
February 21, 2012
On February 17, the IRS issued Notice 2012-21, which extends by six months the deadline to make a portability election for a qualified estate whose executor did not timely file either Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes, or Form 706, United State Estate (and Generation-Skipping Transfer) Tax Return, within nine months of the date of death.
September 29, 2011
2011-09-29 Recently, the IRS issued long-anticipated guidance of interest to those administering estates of persons who died in 2010. Executors who wish to elect application of the §1022 carryover basis regime, rather than the estate tax, received an extension of time and a safe harbor in making that election.
September 1, 2011
In Turner Est. v. Comr., T.C. Memo 2011-209 (8/30/11), Judge Marvell of the Tax Court held that the estate of Clyde W. Turner, Sr., included all the property that he contributed to a family limited partnership upon its formation, even though he gave away a considerable portion of his limited partnership interest before his death in February 2004.
June 10, 2011
Thanks to Politico, we have the news that the IRS estate and gift tax team is auditing taxpayers who have made large gifts to §501(c)(4) advocacy organizations such as American Crossroads and Priorities USA. Ofer Lion, a Los Angeles tax lawyer,
May 18, 2011
A recent Tax Court decision, Estate of Sylvia Riese v. Comr ., T.C. Memo 2011-60 (3/15/11), points out the potential hazards of failing to comply with the terms of a qualified personal residence trust (QPRT). On the advice of her estate planning attorney, Mrs. Riese in April 2000 established a QPRT for her
On March 15, little more than one month before the filing deadline, the IRS released the 2010 version of Form 709, the Gift (and Generation-Skipping Transfer) Tax Return. The late release date was presumably due to the need to revise the form to reflect the significant changes made to the GST tax by the Tax Relief
Estate planners and administrators have been anxiously awaiting the publication of new IRS Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, particularly after the 2010 Tax Relief Act confirmed the availability of carryover basis for 2010 estates. If the estate of a decedent
One of the smarter features of the recent changes in 2010 Tax Relief Act was the decision to reinstate the generation-skipping transfer tax in 2010, but with a 0% tax rate for direct skips. While leaving undisturbed the 2010 tax holiday, the reinstatement of the GST tax structure removed the uncertainty created by
Last week's Heckerling Institute on Estate Planning in Orlando, which ended on January 14, provided a first look at the transfer tax changes made by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Many speakers, who had submitted their outlines before the legislation was
Most estate planners have advised their clients on how to provide for impecunious children. With high unemployment rates for young people and the advent of "boomerang" children, parents are increasingly called upon to cover their children's living expenses, usually on an out-of-pocket basis. Although most of us
On December 15, the Senate by a lopsided 81-19 vote approved the Tax Relief Act of 2010, which includes a two-year extension of the estate tax. Key estate and gift tax elements of the bill include the following: a $5.0 million estate tax exemption and a 35% tax rate, effective in 2011 and 2012 the $5.0 million
Late on December 9, Senate Finance Committee Chairman Baucus (D-Mont.) unveiled legislative language for the estate tax compromise reached by congressional Republicans and President Obama. As reported by BNA's Daily Tax Report, the bill includes the anticipated $5.0 million estate tax exclusion and a 35% tax
The estate tax compromise reached by congressional Republicans and President Obama is still on track for passage, although liberal House Democrats find it hard to swallow. It is expected that the bill will come to the Senate floor today or tomorrow, where enough Democratic senators have expressed support (or at
On December 6, President Obama announced that he and Republican leaders in Congress had reached agreement on temporary estate tax legislation as part of a larger package that would extend the so-called Bush tax cuts. Without the legislation, the estate tax will return to a $1.0 million exemption and a top rate of
Although little more than six weeks remain before the estate tax is reimposed at its 2001 level, there is little indication that Congress views the situation with urgency. As reported today in BNA's Daily Tax Report, leaders in both the Senate and House are focused on the immediate issue of how to pay for and
Although it has yet to appear on the IRS website, a draft version of Form 8939, Allocation of Increase in Basis for Property Received from a Decedent, has been recently circulating among practitioners. Dated June 1, 2010, it is available on the website of Tax Management author Prof. Roger McEowen at the Center
The Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) enacted IRC 1411, which imposes a 3.8% Medicare tax on the net investment income of trusts and estates. Effective for tax years beginning after 2012, the amount subject to tax is the lesser of: (1) the "undistributed net investment income"
Good lawyering appears to have rescued Craig Breakiron from a $2.3 million gift tax liability. The story begins in 1995, when Craig's parents each created a qualified personal residence trust (QPRT) funded with undivided 50% interests in real estate on Nantucket Island. Each QPRT had a 10-year term, after which th
It is almost nine months since the repeal of the federal estate tax took effect, and the chances of timely Congressional action to reinstate it appear slimmer each day. Although Congress will be reconvening for an abbreviated session before the November 2 election, it is unlikely that either house will want a
The approaching dog days of a Washington summer seem to have reminded Congress that it must act on the estate tax. Recent activity in both houses of Congress has raised the hopes of those who expect a decision before the tax is reinstated at its 2001 levels on January 1, 2011. Here is a chronology of recent event
Rep. Sander Levin (D-Mich.), Chairman of the House Ways and Means Committee, on June 9 introduced H.R. 5486, the Small Business Jobs Tax Relief Act of 2010. An earlier version of this legislation (H.R. 4849) was passed by the House in March, but was never taken up by the Senate. Estate planners may not be
Little noted in the press reports surrounding the April 15 release of President and Mrs. Obama's 2009 income tax returns is the fact that each of them also released copies of their 2009 gift tax returns on Form 709. Anyone hoping that the President was reporting the funding of a two-year GRAT (see the
Last week's Eighth Circuit decision in Holman v. Commissioner (No. 08-3774, 4/7/10) had the feel of the early days of family limited partnership tax litigation, when the IRS hoped that Chapter 14 of the Code would provide it with a simple tool for denying FLP discounts. The decisions in Church and Estate of
February 2, 2010
The recently-concluded Heckerling Institute on Estate Planning, held in Orlando on January 25-29, included considerable discussion of what estate planners can do for their clients now that the estate tax is repealed. Although most planners had assumed that repeal would not come to pass, Congressional inaction has forc
December 7, 2009
On December 3, the U.S. House of Representatives, in a 225 200 vote, approved H.R. 4154, the "Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009." This bill, which is only one page long, permanently extends
November 18, 2009
A long-simmering dispute between taxpayers and the IRS came into view with the Eighth Circuit's decision in Estate of Christiansen v. Commissioner (Docket No. 08-3844, 11/13/09). Helen Christiansen's will left her entire estate to her daughter Christine, but with a gift over to a charitable foundation and a
October 2, 2009
The recent publication of Private Letter Ruling 200939003 by the IRS is a timely reminder of the potential use of IRC 6166 to defer payment of the generation-skipping transfer tax. In the ruling, Grandfather had established a trust for Child, funding it with the stock of an S corporation. Child was to receive the
Bloomberg BNA Releases New Portfolio 870-1st -- Private Placement Life Insurance and Annuities
Conservation Easements: Appraisals don't have to be Tidy to be Qualified
IRS Finally Provides Guidance on Choice-of-Law Issues Left Unresolved by United States v. Windsor
Anomaly In Proposed Regulations May Result In Ordinary Income Items Being Taxed As Net Investment Income When Distributed To CRT Beneficiaries
Projected Inflation-Adjusted Amounts for 2014