Small business corporations, aka S corporations[1], have been much more common than their C corporation counterparts since 1997.[2] S corporations are taxed much differently than their C corporations, with the defining characteristic being that S corporations are flow-through entities, as they are not taxed at the entity level and avoid the widely known “double taxation”…
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The recent Tax Court decision in McDougall v. Comm’r, 163 T.C. No. 5 (2024) provides important insights into the intersection of Qualified Terminable Interest Property (QTIP) trusts and the associated gift tax implications. This article delves into the case’s facts, legal issues, court holdings, and practical implications for estate planners and tax professionals. Factual Background…
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When receiving a bequest, many people question whether they will be subject to income tax.[1] As a basic matter, an individual’s income “does not include the value of property acquired by gift, bequest, devise, or inheritance.”[2] However, that does not mean the individual receiving assets by bequest has no income tax consequences to consider. Those consequences…
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As of the release of iOS 15.2, December 13, 2021, Apple released a new feature for its users, “Legacy Contacts”.[1] Historically, estate fiduciaries could receive this information with a court order, but the new process is designed to minimize the expense of time and money associated with getting access to a decedent’s account information. So,…
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Holding property in a limited liability company, or LLC, can provide a certain level of asset protection to individuals as opposed to holding such property in their individual capacity. However, that is not to say that a good asset protection plan is as simple as transferring property to a formed LLC and calling it a…
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As previously written upon by my colleague[1], probate is the process of proving a decedent’s Will to be his or her true Last Will and Testament. But, what happens when a decedent executed a Will when he or she lacked mental capacity? Or while under pressure from a certain beneficiary? Or the Will was not…
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In a recent case out of the Court of Appeals for the State of Mississippi, the Court held that a writing titled an “Article of Agreement” (the “Agreement”) was sufficient to convey an interest in real estate to the decedent’s sisters.[1] The primary issue to be decided by the Court was whether the Agreement executed…
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In a recent decision, the Tax Court addressed the complexities of gift tax and qualified terminable interest property (“QTIP”) rules, providing important insights for estate planning professionals and taxpayers alike.[1] The case centered on the interpretation of provisions related to the taxation of transfers between spouses, and in this context, termination of QTIP interests and…
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In a previous writing, I discussed the potential of an executor to be personally liable for a decedent’s tax obligations.[1] That discussion was based on lessons learned from a Tax Court opinion,[2] outlining certain steps for executors to consider in minimizing exposure to such personal liability. In 2023, in a split decision, the Ninth Circuit…
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On February 8, 2024, the Mississippi Supreme Court issued its opinion[1] regarding an issue of first impression regarding Mississippi’s Principal and Income Act of 2013 (the “Act”).[2] As a worthwhile note, the Court noted that this is an issue of first impression and acknowledged as well as appeared to oblige the parties so as to…
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