Tag Archives: gross estate

Asset Sales to Grantor Trusts: Antidote to New Estate Tax?

PDF:   Sales of Assets to Defective Grantor Trusts I.     Introduction   Asset sales to grantor trusts exploit income tax provisions enacted to prevent income shifting by capitalizing on different definitions of “transfer” for transfer and income tax purposes. The objective … Continue reading

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Marital Deduction Planning

PDF: Marital Deduction Planning.wpd I.    Review of Current Wills   The estate tax will resume no later than January 1, 2011. At that time, the exemption amount may be $1 million (if Congress fails to do anything), or it could … Continue reading

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New Carryover Basis Rules

Prior to 2010, property acquired from a decedent generally received a stepped-up basis under IRC § 1014. The purpose of the statute is to avoid the double taxation that would result if the asset were first subject to estate tax … Continue reading

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Life Insurance Trusts

Life insurance trusts have long assumed a position of importance in estate planning, especially for larger estates, since insurance proceeds may be excluded from the settlor’s gross estate, thereby reducing or eliminating estate taxes. These tax savings may be achieved if the trust is drafted to authorize (but not require) the trustee to purchase assets from, or loan money to, the estate. Continue reading

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Requirement of Filing Federal Gift Tax Return

The requirement of filing a federal gift tax return arises when one has made a completed taxable gift. Incomplete gifts do not impose any gift tax filing requirement. Thus, the donor’s gift of a diamond ring would exemplify a completed gift. However, if the donor reserved the power to revest beneficial title in the ring to himself at a later date, the gift would be incomplete.
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The IRC § 2036 Trap in Planning With FLPs & Grantor Trusts

Printer-friendly PDF Memorandum:  The IRC § 2036 Trap in Planning With FLPs & Grantor Trusts.wpd The IRS has advanced many theories to challenge the gift and estate tax savings occasioned by the use of family entities and grantor trusts in … Continue reading

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Marital Deduction Trusts

Property passing by bequest outright to a surviving spouse qualifies for the unlimited marital deduction. Property placed in trust for the surviving spouse may, depending upon the trust language, also qualify for the marital deduction. However, Code Sec. 2056(b) provides that a bequest to a surviving spouse will not qualify for the deduction where the interest passing to the surviving spouse will “terminate or fail.” Terminable interests are generally those which enable a person other than the surviving spouse to possess or enjoy any part of the property after a lapse of time or the occurrence of an event, such as the surviving spouse’s remarriage. Continue reading

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Irrevocable Life Insurance Trusts (ILITs)

Life insurance proceeds are excludible from beneficiaries’ income under §101, provided the policy had not been transferred for valuable consideration. Proceeds from policies transferred in trust will also be excluded from the insured’s gross estate provided the insured (i) retained … Continue reading

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