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IRS Grants Taxpayers Two-Year Window to File Portability Election

In a long-awaited move, the IRS announced recently that taxpayers will now have at least two years to file an estate tax return to elect portability of a decedent’s unused estate tax exemption to the decedent’s surviving spouse.

The new rule was articulated by the IRS in Revenue Procedure 2017-34 and became effective as of June 9, 2017.  Under this new two year filing window, which the IRS characterizes as a “simplified method for certain taxpayers to obtain an extension of time  . . . to make a ‘portability’ election”, a decedent’s estate will have until the later of January 2, 2018 or the second anniversary of the decedent’s death to file an estate tax return to elect portability.  In order to take advantage of this simplified method for obtaining an extension of

More on Transfer Tax Issues Post Windsor and the Legalization of Same-Sex Marriage

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In a recent Notice, the Internal Revenue Service set forth some administrative procedures helping taxpayers recalculate gift and generation-skipping transfer tax exemption with respect to gifts and bequests made to or for the benefit of a same-sex spouse, or descendants of same-sex spouses before the Supreme Court Case United States v. Windsor was decided, even though the statute of limitation for claiming such exemption had expired.

Prior to the Windsor decision, the U.S. government (and by extension, the Internal Revenue Service) did not recognize marriages of same-sex couples. In the Windsor case, the estate of a decedent sought to claim the estate tax marital deduction for bequests to the decedent’s same-sex spouse (the couple was legally married in Canada and their marriage was recognized by their home state of New York prior to

Planning and the Death of the Death Tax

Planning and the Death of the Death Tax

May 1, 2017

Authored by: Andrew Bleyer and Larry Brody

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On Wednesday afternoon the White House again proposed eliminating the so-called death tax as part of its tax reform plan, but the details remain sparse.  When pressed for specifics Director Cohn simply stated that with the implementation of the administration’s tax plan, the death tax would disappear.

The phrase “death tax” entered the popular lexicon by way of tax reformers wanting to summarize and caricature the several parts of the Federal transfer tax system.

30 Rock, Oysters, and Generation-Skipping Transfer Tax

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Billionaire David Rockefeller, the grandson of John D. Rockefeller, passed away recently at the age of 101.  In 2017, Forbes estimated that his fortune, investments in real estate, share of family trusts, and other holdings were worth $3.3 billion.  However, because of his family history, it is quite possible that a large portion of that $3.3 billion will not be subject to the estate tax upon his death.

Benefactors Beware: Fake Charities Included in IRS List of Top Tax Scams for 2017

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Written by Emily Manns and originally posted on BryanCaveCharityLaw.com

Every year, the IRS issues its “Dirty Dozen” Tax Scams list, a compilation of tactics and devices used by scam artists against taxpayers.  While the threat exists year-round, the IRS promulgates the list ahead of filing season. As susceptible taxpayers prepare their returns, they face a higher risk of being targeted.

Charitable Income Tax Deductions: The Rockefeller Edition

rockefeller-center-midtown-west--new-york-city-new-york-usa_mainBillionaire David Rockefeller passed away this week at the age of 101.  According to Forbes magazine, during his lifetime, the well-known philanthropist gave away nearly $2 billion.

In light of this newsworthy charitable donation, we thought now would be a good time to remind everyone of some of the basic income tax deductions available for gifts to charities.

Court Orders Administrator To Elect Portability

The following was written by Luke Lantta of Bryan Cave’s fiduciary litigation team and originally posted here

When the IRS enacted the portability election provisions in 2011, which allowed estates of married taxpayers to pass along the unused part of their estate and gift tax exclusion amount to their surviving spouse, it remarked that it “expect[ed] that most estates of people who are married will want to make the portability election. . . .”  But, to elect portability, an estate tax return must be filed in order to pass along the exclusion.  So, what happens when an executorrefuses to elect portability?  Take them to court, of course.

THE STATUTE “SAYS WHAT IT MEANS AND MEANS WHAT IT SAYS”

U.S. v. McNICOL 829 F.3d 77 (1st Cir. 2016) (cert. denied 1/9/2017)

Trusts and Estates practitioners often focus solely on the Tax Code found in Title 26 of the United States Code and ignore other parts of the United States Code (U.S.C.). However, it is a mistake to do so as Marci McNicol learned first-hand. In this case, the Federal Priority Statute found in 31 U.S.C. § 3713 came into play to impose liability on Marci for the decedent’s unpaid Federal income tax liability.

Here, at the time of his death, the decedent owed over $300,000 in Federal income taxes. As a result of this and other liabilities, the decedent’s estate, which consisted almost entirely of interests in two closely held companies, was insolvent. Marci, the decedent’s widow, transferred decedent’s interest in one of the companies to herself even before the court had appointed

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