Tax lawyers routinely test proposed transactions against the technical requirements of the Internal Revenue Code. The Tenth Circuit’s recent decision in Liberty Global, Inc. v. United States[1] is a reminder that literal compliance may not always end the analysis. In Liberty Global, the court applied the codified economic substance doctrine to deny a claimed §…
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Income tax planning opportunities using non-grantor trusts have been around a long time, whether focused on state or federal income tax.[1] The One Big Beautiful Bill Act[2] (“OBBBA”) has renewed attention on non-grantor trusts as income tax planning vehicles. This is due to a number of provisions in OBBA that can benefit from including one…
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Looking for opportunities to reduce tax liability is common. There is nothing wrong with seeking to reduce tax exposure. The late Judge Learned Hand is famous for a commonly quoted opinion from the Second Circuit Court of Appeals, saying: “Anyone may arrange his affairs so that his taxes shall be as low as possible; he…
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Allocating value to personal goodwill can materially affect the tax consequences of a business sale, estate valuation, or gift transfer. But the planning only works when the facts support that the goodwill truly belongs to an individual rather than the business entity. In any business enterprise, goodwill can be a significant and valuable asset. Goodwill…
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We have written before the importance of a property prepared Form 706 Estate (and Generation Skipping Transfer) Tax Return (“706”)[1] as well as the importance of a properly prepared Form 709 Gift Tax Return[2]. In our prior article discussing the 706, we highlighted a Private Letter Ruling (“PLR”) in which the Estate was granted a…
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We have previously discussed the impact of increasing transfer tax exemptions on income tax planning.[1] Those considerations have been solidified after passage of the recent tax legislation known as the One Big Beautiful Bill Act which increased transfer tax exemptions to $15 million, annually adjusting for inflation, without any scheduled sunset date. This can make…
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Use of irrevocable trusts is common in a number of planning scenarios – tax planning, estate planning, business succession, Medicaid qualification, asset protection, etc. Just like there are several reasons irrevocable trusts are created, there can be reasons why a trust may be terminated before the expiration of the term stated in the trust agreement.[1]…
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A recent Tax Court memorandum opinion[1] presents a thorough illustration of the Court’s approach to valuation disputes in syndicated conservation-easement transactions. As is historically typical in these transactions, the case involved a partnership interest sale shortly before the donation and an associated appraisal asserting a dramatic increase in value when compared to the original purchase…
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The Mississippi Supreme Court recently revisited the intersection of family law and probate.[1] The decision offers a reminder that alimony obligations, while enforceable during a recipient’s life, remain subject to statutes of limitation and proper crediting principles that can determine whether an estate owes anything at all. The case at hand offers an interesting twist…
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“Asset protection is a legitimate, legally sanctioned objective; though one that has limitations of its own.” The timing of asset protection planning can be critical when it comes to these “limitations.” By the time a creditor is reasonably foreseeable, the creditor may be able to stop or unwind transfers of assets whether through obtaining an…
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