QTIP Termination 3 Years Before Death May Increase Estate Tax
We previously posted on the gift tax implications of terminating a Qualified Terminable Interest Property Trust (“QTIP”) before the death of the surviving spouse (“spouse”). To recap, a termination of a QTIP trust whereby the spouse relinquishes his or her entire interest in the trust gives rise to taxable gifts by the spouse under Code [...]
Wandry v Commissioner: Tax Court Blesses Use of Defined Value Formula Clause
In an extremely important taxpayer victory, the United States Tax Court issued a memorandum opinion upholding the use of a defined value formula clause to fix the value of the donor’s gift for federal gift tax purposes. Wandry v. Commissioner, T.C. Memo 2012-88 (March 26, 2012). This type of formula clause is intended to prevent [...]
Low Interest Rates – The Good and Not-So-Good Planning Opportunities
The IRS issues every month a “7520 rate” (named after the code section to which it relates) which is used as an assumed rate of return to measure the values of gifts in certain advanced estate planning techniques. The 7520 rate for March is at a historically low 1.4%. Generally, many estate planning techniques succeed [...]
Portability Election Deadline Extended
On February 17, 2012, the IRS issued Notice 2012-21, which allows certain estates of married individuals who died during the first six months of 2011 to extend the time to make the portability election. Code section 2010(c) was amended in 2010 to allow the estate of a decedent who dies after 2010 and who is [...]
Super Committee Gift Tax Rumor
The Joint Select Committee on Deficit Reduction (the “Super Committee”), a 12 member bipartisan Congressional committee, is scheduled to announce its proposals on November 23rd for reducing the national deficit by at least $1.5 trillion over the next 10 years. The Super Committee proposals may include changes to the current estate, gift and generation-skipping transfer [...]
Form 8939 and Instructions
This is quick alert for our readers. Yesterday, the IRS posted Form 8939, Allocation of Basis Increase for Property Acquired from a Decedent, and today, the IRS posted the instructions to the Form 8939. The Form 8939 has been substantially revised since the last release, and this is the first set of instructions issued by [...]
AICPA’s Comments on Notice 2011-66
On September 7, the AICPA Carryover Basis Task Force sent comments to the IRS on Notice 2011-66 making suggestions and requesting additional guidance on several issues, some of which are summarized below. They suggest a “policy of restraint” in auditing taxpayers having carryover basis issues for tax years after 3 years from the filing of the [...]
Form 8939 Filing Deadline Extended
Today, pursuant to Notice 2011-76 (the “Notice”), the IRS extended the due date for filing the Form 8939 from November 15, 2011 to January 17, 2012. This Notice is unexpected considering shortly ago on August 29, 2011 the IRS issued Notice 2011-66 extending the deadline for filing the Form 8939 to November 15, 2011. Rev. Proc. 2011-41 was [...]
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