IRS grants estate executors who want to claim portability up to 15 months after the decedent's death to file an estate tax return.

In Karlen v. Comr., the Tax Court, in a summary opinion that may not be appealed or cited as precedent, determined that distributions from the taxpayers' §529 plan accounts were includible in their gross income. The taxpayers were not, however, liable for the 10% penalty that is imposed on withdrawals not used for educational expenses.

In In re Mortensen, we have what appears to be one of the first decisions to consider whether an individual may use a state's - in this case Alaska's - self-settled asset protection spendthrift trust statute as a shield in a federal bankruptcy proceeding. On the facts set forth below, the bankruptcy court determined that he could not, a decision that may have broader implications depending on whether the case was decided solely on its "bad" facts, or on a broader reading of the federal bankruptcy Code.

 

A recent court case involving the Nature Conservancy and property on Martha's Vineyard is a wake-up call for charities on the importance of correct contemporaneous documentation of value when negotiating conservation easements, several practitioners tell Bloomberg BNA.

The IRS, in Rev. Rul. 2011-28,1 has ruled that the retention, in a nonfiduciary capacity, by the grantor of a life insurance trust of a §675(4)(C) "power of substitution" over trust assets will not be viewed as the retention of an "incident of ownership" in the policy under §2042.

 

 

On July 14, 2008, the IRS released T.D. 9414, which addressed the valuation for federal estate tax purposes of a retained interest in certain trusts. The trusts affected include charitable remainder annuity trusts, charitable remainder unitrusts, grantor retained annuity trusts, grantor retained income trusts, grantor retained unitrusts, qualified personal residence trusts and personal residence trusts. In effect, the IRS concluded that, under §2036, the amount includible in the grantor's estate if he or she dies during the term of one of the foregoing types of trust is limited to the value of the remaining retained annuity or unitrust interest, which is not necessarily (although it may be), equal to the value of the entire corpus.

 

Section 2032(a) provides that the value of the gross estate may be determined, if the executor so elects, by valuing all the property includible in the gross estate as follows. Property distributed, sold, exchanged, or otherwise disposed of during the 6-month period immediately after the date of death (alternate valuation period) is valued as of the date of distribution, sale, exchange, or other disposition (transaction date).

 

IRS withdraws and reproposes rules (REG-112196-07) that would allow estates to use a beneficial six-month alternate valuation date more broadly.

Estate tax officials at the Treasury Department say they want to finalize proposed rules on portability by the end of the year, as they continue to field questions on what constitutes a timely filed Form 706.

IRS clarifies in final rules (T.D. 9555) the interaction of several sections of the tax code relating to trusts for portions of property includible in a grantor's gross estate, if the grantor has retained use of the property or another interest.