It’s common knowledge among tax practitioners that the IRS is not a fan of formula gift clauses that attempt to pin the amount of the gift to a dollar figure such that the actual gift is adjusted in the event of a successful valuation challenge by the IRS.[1] However, in a recent Tax Court case,…
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On July 1, 2020, the new Mississippi Uniform Estate Tax Apportionment Act went into effect under Sections 33-46 of S.B. 2851, replacing the old Uniform Estate Tax Apportionment Act under Title 27 Chapter 10 of the Mississippi Code. What does apportionment of estate taxes mean anyway? Apportionment of estate taxes is the determination and allocation…
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Due to historically low rates combined with potentially depressed asset values due to the recent market decline, now may present an unparalleled opportunity to take advantage of wealth transfer techniques to shift significant wealth downstream with little to no use of gift tax exemption. As I write the article, the United States and the rest of…
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I was fortunate enough to attend the 54th annual Heckerling Institute on Estate Planning in Orlando. Heckerling is known worldwide for being one of the most innovative and informative estate planning conferences put on. The topics are always relevant and timely, and there are always some new and innovative planning techniques and ideas presented. Additionally,…
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In a recent release, the IRS announced the release of final regulations under IRC § 2010. The new final regulations largely adopt the previous proposed regulations published last November. The final regulations were released in Treasury Decision 9884 on November 22, 2019 and effective on and after November 26, 2019. I previously wrote about the…
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Parents are often in a position to help their children take advantage of business opportunities. A parent’s connections, business knowledge, expertise, and other intangibles acquired over may years of work can be used to benefit a child starting a career or business. Likewise, a parent may advance funds to a child to start or acquire…
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The Tax Cut and Jobs Act (“TCJA”) enacted some sweeping changes to our nation’s tax laws. One major change was the modification of Section 2010 to increase in the individual estate tax exemption from $5M, indexed for inflation ($5.49M in 2017), to $10M, indexed for inflation ($11.2M in 2018, 11.4M in 2019). Thus couples went…
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On September 16, 2019, the Internal Revenue Service (“IRS“) announced that it would be mailing settlement offers for certain taxpayers under audit who participated in “abusive” micro-captive insurance transactions. The micro-captive transactions were listed as a transaction of interest by the IRS back in 2016. Section 2 of Notice 2016-66 described the transaction itself as…
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For a few months, the short and mid-term applicable federal rates have been on the heels of one another. These rates ride with treasury rates and the economy in general. For some reason, here lately the mid-term rates have been lower on occasion than the short-term rates. I even caught myself thinking, is this a…
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The Ninth Circuit recently upheld a 2016 Tax Court case that the charitable deduction for estate taxes was limited to the post-death value of the property actually received by the charity rather than the value of such property that was included in the decedent’s gross estate. Following its decision in Ahmanson Foundation v. U.S., 674…
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