Death of Grantor: Conversion of LLC to Tax Partnership

Common in estate and trust planning is the gift or sale of assets to an irrevocable grantor trust[1] structured to be outside of the grantor’s taxable estate.[2] Often, such gifts or sales are made of interests in family entities such as LLC’s.[3] These entities can provide significant non-tax benefits including consolidation of assets, centralized management,…
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Alternative Dispute Resolution in Estates and Trusts in Mississippi

Litigation involving estates and trusts, while sometimes impossible to avoid, is usually exhausting to all parties involved, especially given that such litigation is often among family members and/or is following the death of a loved one. Alternative dispute resolution (“ADR”) is an alternative to traditional litigation, encompassing various methodologies, including mediation and arbitration, aimed at…
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Practice Help: Making Late QSST and ESBT Elections

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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What are the Income Tax Consequences of Bequests?

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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Important Estate Planning Concerns for Nontaxable Estates

The practice of “estate planning” covers a broad range of topics, one of which is accounting for gift and estate taxes. From the inception of the estate tax until the early 2000s, when the exemption amount was less than a million dollars, this was a facet of estate planning that practitioners had to evaluate in…
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Navigating Gift Tax and QTIP: A Landmark Case

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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Yet Another Proposed Listed Transaction – CRATs and Annuities

On March 25, 2024, the IRS issued Prop. Reg. Section 1.6011-15[1], which designates certain transactions involving charitable remainder annuity trusts (“CRATs”) in tandem with single premium immediate annuity (“SPIA”) products as listed transactions[2]. Last year, I wrote an article in which the Tax Court decided against a taxpayer couple who undertook this exact transaction.[3] Now,…
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Successor Trustee Liability for Unpaid Estate Tax

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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Crider Trust Case – The Case for the Cautious Fiduciary

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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