Conservation Easements: The Importance of Proper Planning and Compliance

The United States Tax Court recently decided yet another case[1] involving conservation easements and the corresponding charitable contribution deduction. Such cases have been prevalent lately, although recent cases have dealt more with syndicated conservation easements and the IRS’s failure to follow certain procedural rules.[2] In the subject case of this article, however, the Court, for…
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Gifts to Employees – Fields v. Commissioner

Being in the midst of the holiday season, many people are making gifts to friends, family members, employees, and others important to them. Rarely is much thought given to the income tax consequences of such gifts. A recent case from the Tax Court illustrates how gifts between an employer and employee are treated.[1] Income Tax…
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The Importance of a Properly Prepared Form 709 Gift Tax Return

In a prior article, I wrote about the importance of properly prepared Form 706 Estate Tax Return, discussing a Private Letter Ruling (“PLR”) that highlighted some common mistakes made on the Form 706.[1] In that article, I discussed issues related to the marital deduction and the allocation of a decedent’s unused Generation Skipping Transfer Tax…
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Checks Written Before But Cashed After Death Includible in Gross Estate

In a recent Tax Court case[1], the Court held that the combined value of ten checks written prior to the decedent’s death, but cashed after his death, was included in the gross estate of the decedent. However, as discussed below, the IRS had conceded that three of the ten checks were not included in the…
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New Estate and Gift Tax Clawback Proposed Regulations

On November 26, 2019, the Treasury Department and the IRS issued final regulations under Section 2010 which provided taxpayers with some much needed assurance that they would not be punished for utilizing their gift and estate tax exclusion (“Exclusion”) during their lifetime if Exclusion amounts were lower when they died (“Anti-Clawback Regulations”).[1] See Josh Sage’s…
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The Pros and Cons of Lifetime Gifting

Under current law, the unified credit against estate and gift tax sits at $10,000,000, subject to indexing for inflation (the “Exemption”).[1] As a result of the Tax Cut and Jobs Act, this number increased from $5,000,000 effective January 1, 2018 and through December 31, 2025, with the number set to drop back down to $5,000,000on…
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Court Says No to IRS Attempt to Aggregate Gifts for Discount Purposes

In a recent case out of the United States District Court for the District of Connecticut, the Court denied the IRS’ motion for summary judgment and refused to aggregate the gift of partial interests in real estate together for purposes of valuing the gifts and thus determining appropriate discounts.[1] The IRS alleged that no discount…
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Original Characterization by Taxpayers Matters, Even When Reporting Improperly

In an ongoing breach of contract case,[1] in which the parties contested the treatment of certain transfers as either gifts or as compensation under a contract, the U.S. District Court of Arizona dismissed the portion of the plaintiff’s motion for summary judgment related to “gift tax damages” due to the fact that gift tax labilities…
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Warne Case gives Insight on Valuation and Gifting

Many know the old adage of “it’s the thought that counts” when it comes to gifting. According to a recent Tax Court opinion, when it comes to charitable contributions, what the recipient receives is significantly more important than what is given by the donor. Charles Allen previously discussed this issue in his article on the…
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