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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Earlier this year I discussed President Joe Biden’s proposed tax policies, which was prepared in anticipation of President Biden’s impending announcement regarding the Build Back Better Act.[1] As we approach the end of the Biden administration’s first year, tax professionals are on the edge of their seat. A plethora of different legislative changes directed at…
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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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In May of this year the U.S. Tax Court issued a memorandum of opinion on the value of several assets included in the Estate of Michael Jackson (“Estate”) for federal estate tax purposes.[1] This opinion comes more than a decade after Jackson’s death in June of 2009 and provides some resolution (albeit subject to appeal)…
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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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A recent Tax Court opinion[1] highlights one of the risks of serving as executor or administrator of an estate, potential liability for a decedent’s tax obligations. The case involves application of the federal priority statute[2] applicable to fiduciaries.[3] That statute provides, in relevant part, that “a representative of a person or an estate (except a…
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As result of the special runoff in Georgia for their two senate seats, the Democrats will now hold power in the Senate, the House, and the Presidency following President-Elect Joe Biden’s inauguration on January 20th. With the Democrats controlling the Presidency, the House, and the Senate, many have started to wonder what tax changes may…
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In a newly released Chief Counsel Advice opinion[1], the transfer of assets from a foreign entity referred to as the “Foundation” directly to a third party (the “Recipient”) at the request of the beneficiary of the Foundation (the “Beneficiary”) was deemed to be a gift from the Beneficiary to the Recipient. This is a logical…
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INTRODUCTION In a prior article, Charles J. Allen previously discussed the tax plans of the democratic presidential candidates, while Josh Sage discussed some of Biden’s potential changes here. With the Associated Press calling the presidential race for former vice president Joe Biden on November 7th, time is running short for many taxpayers to take advantage…
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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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