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Let’s Go Over this Again: Remember to Dot Your I’s and Cross Your T’s

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Even though you think you have done everything right, the statute of limitations may not have started to toll if your Form 709, Gift (and Generation-Skipping Transfer) Tax Return, contains errors. Once a properly completed (how much can we stress the words PROPERLY COMPLETED?) Form 709 is filed, the Service must assess the amount of any gift tax within three years of the filing date. Under the Regs, a transfer is adequately disclosed when the return provides the following:

(i) A description of the transferred property and any consideration received by the transferor; [and] … (iv) A detailed description of the method used to determine the fair market value of property transferred, . . . including any financial data . . . utilized in determining the value of the interest.

Proponents of Estate Tax Still Estate Plan

Proponents of Estate Tax Still Estate Plan

July 14, 2014

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

ClintonSenateWhile constant attention is being given to Hillary Clinton’s potential decision to run for the presidency in 2016 and the release of her latest book, Hard Choices, last month, news sources recently reported that she and former President Bill Clinton have taken advantage of several of the estate planning techniques recommended by trusts and estates attorneys for high net worth individuals.

This is interesting, in part, because the Clintons support the estate tax and have not been in support of its repeal.

According to reported sources, each of the Clintons created a qualified personal residence trust and each contributed his or her 50% ownership interest in their Chappaqua, New York house to his or her respective trust. A qualified personal residence trust, commonly called by its acronym QPRT, is an IRS sanctioned

Life (and Litigation) Lesson of the Day: Don’t Bite the Hand That Feeds You

462913017Apparently, this life lesson was not learned, or if learned, was forgotten, by Roy Greenbaum, the Personal Representative in Estate of Tanenblatt v. Comm’r. The issue in this case concerned the valuation of a 16.667% interest in an LLC included in the Diane Tanenblatt’s gross estate.

That Underwater Policy Does Not Have Any Value, Right?!

SCUBATaxpayers/insureds are often surprised when they are taxed on the value of an old policy that was underwater, when it was transferred to them, causing them to assume that the policy had no value for the government to tax. Here again, the taxpayers in Schwab v. Commissioner (9th Cir. 2013), were surprised that they had recognized taxable income on the distribution to them of life insurance policies from their non-qualified plan, which had surrender charges that exceed their cash value.

Michael and Kathryn, a married couple, were employees of Angels and Cowboys, Inc., which sponsored a non-qualified multi-employer welfare benefit plan that was administered by a third party. Each of them caused the plan to purchase, with a single premium, a variable universal life insurance policy with a three-year no lapse guarantee.

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