Estate and Gift Taxation Law Blog

For estates of decedents dying in 2010, the Economic
Growth and Tax Relief Reconciliation Act of 2001 (“EGGTRA”), commonly
referred to as the Bush tax cuts, repealed the federal estate tax and
substituted a modified carryover basis regime for a step-up basis regime for
purposes of determining the cost basis of inherited assets in the hands of an estate
beneficiary.  As a result, a beneficiary
... Read More

On June 17, 2010, the U.S. House of Representatives passed H.R. 5297, the Small Business Jobs and Credit Act of 2010 (commonly referred to as the "Small Business Jobs Bill").

In the last few weeks, since H.R. 5297 was passed, Senate Minority Whip Jon Kyl (R-Arizona) and Senator Blanche L. Lincoln (D-Arkansas) have been working on a plan concerning the future of the estate tax.  Together they have advanced a proposal requiring the Senate Finance Committee to amend... Read More

SUMMARY
The U.S. Court of Appeals for the Eighth Circuit has affirmed a decision of the U.S. Tax Court in sharply reducing valuation discounts claimed by a married couple with respect to the transfer of limited partnership (LP) interests gifted to their daughters. Holman v. Commissioner (8th Cir. 4/7/2010), 2010-1 USTC ¶60,592, aff'g 130 TC 170. The 8th Circuit agreed with the Tax Court's holding that, in calculating the value of the gifted LP interests,... Read More

A federal district court in Indianapolis recently held that the annual gift tax exclusion did not apply to taxpayers' gifts to their children of membership interests in a family-owned limited liability company. The court found that, based on certain restrictive provisions in the LLC's operating agreement, the membership interests represented "future interests" rather than "present interests" in the entity's assets.

The distinction between a present interest and... Read More

A recent Tax Court case highlights the critical importance of proper vesting on deeds and other instruments of transfer, and the potentially dire tax consequences of improper vesting.  The case involved the joint interest of a decedent's predeceased spouse in two parcels of real property, an interest that was held to be includible in decedent's gross estate for federal estate tax purposes. Because the transfer deeds creating the joint interest in each property did not expressly state the... Read More

Under the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16), as amended in part by the Jobs Creation and Worker Assistance Act of 2002 (P.L. 107-147), collectively referred to as the Bush tax cuts, a new provision was added to the federal gift tax law, requiring that any transfer of money or other property to a trust after 12/31/2009 be deemed a taxable gift, subjecting the transferor to gift tax ramifications, unless the trust qualifies as a grantor trust of the... Read More

On December 3 2009, the U.S. House of Representatives, by a vote of 225 to 200, passed long-awaited legislation concerning proposed changes to the federal estate tax. The new bill, H.R. 4154, officially titled the Permanent Estate Tax Relief for Families, Farmers and Small Businesses Act of 2009, would, if eventually signed into law, permanently extend the 2009 top federal estate tax rate of 45% and provide for an estate tax exemption of $3.5 million ($7 million for married couples with... Read More