Spousal Lifetime Access Trusts (“SLATs”) are one of the many estate planning tools available to taxpayers, and have seen a surge in popularity recently, such that they are one of the most used options for utilizing taxpayers’ federal lifetime gift and estate tax exclusion (“Exclusion”) during life. Each taxpayer’s Exclusion amount, or the amount which…
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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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On March 3, 2021, the Tax Court issued a new opinion in Pankratz v. Comm’r, T.C. Memo 2021-26. This case is a good reminder of some of the good faith and reasonable reliance rules to avoid penalties. The opinion, authored by Judge Holmes, was a typical Holmes’ opinion. It told a detailed story of the…
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It is quite common in transactions for the seller to accept a promissory note with payments over time rather than being paid the full purchase price up front. In this situation, if the taxpayer were to be taxed on the full amount of income at the time of the transaction, but not be paid the…
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As taxpayers are preparing their 2020 income tax returns, several will face questions related to remote working. Can they deduct employment related expenses for new furniture, new equipment, and other items to facilitate working remotely? Can they take a home office deduction? In what state(s) should they file income tax returns? These questions are nothing…
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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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Here we are coming upon the fourth anniversary of the one of the most shocking nights of our country since perhaps the Battle of Saratoga and one of the largest cash outlays by our government ever known by means of the CARES Act. On the heels of these events Democrats are setting the stage to…
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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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As a basic matter, creditors of a trust beneficiary generally do not have access to assets of the trust.[1] The primary exception is that creditors generally can access trust assets distributable to the settlor of the trust, such a trust being considered “self-settled.”[2] Many states have abolished this exception for trusts that satisfy certain statutory…
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