Estates

Gifts to Trust Qualify for Annual Exclusion

The Tax Court held that the withdrawal rights provided in a trust declaration were not illusory and that therefore a married couple's gifts to the trust were gifts of present interests in property that qualified for the annual exclusion.

Using a Crummey Trust to Preserve Gift Tax Exclusion

In the typical Crummey trust, a periodic contribution of assets to the trust is accompanied by an immediate withdrawal power that gives the beneficiary the right to withdraw the contribution for a limited time.

The Impact of the Net Investment Income Tax on Estates and Trusts

This article describes the calculation of the Sec. 1411 net investment income tax on estates and trusts, demonstrating that the additional complexity and burden of the tax may give tax professionals pause in advising that a trust is a viable means for accumulating and preserving wealth from one generation to the next.

Fiduciary Fee Unbundling Rules Delayed Until 2015

In response to a comment that the current effective date of the new rules on fiduciary fees does not give fiduciaries enough time to implement them, the IRS amended T.D. 9664 to delay the date.

Recent Developments in Estate Planning: Part 2

This is the second in a two-part article examining developments in estate, gift, and generation-skipping transfer tax and trust income tax between June 2013 and May 2014. This article covers trust developments, the taxation of trusts under the new 3.8% net investment income tax, President Barack Obama's estate and gift tax proposals, and inflation adjustments for 2014.

Final Sec. 67(e) Regulations: The End of a Long Journey

Sec. 67(e) reached the end of a long and tortured journey recently, when the IRS issued final regulations defining, once and for all, which expenses of an estate or trust are classified as miscellaneous itemized deductions subject to the 2% floor and the alternative minimum tax.

Tax Planning Opportunities With BAPTs

A new tax planning idea that the authors of this item call a Business Asset Protection Trust (BAPT) creates a variety of income tax planning opportunities touching on international transfer pricing, S corporation trust eligibility rules, Sec. 355 split-offs, and captive insurance companies. It also creates user-friendly internal swaps that do not need to meet the draconian requirements of Sec. 1031.

Removing Capital Gains From Trusts

The implementation of the Uniform Principal and Income Act of 1997 (UPAIA) and the 2004 revisions to the regulations under Sec. 643 have provided fiduciaries with some flexibility in making distributions of capital gains to beneficiaries.

Trust Can Qualify for Sec. 469(c)(7) Exception

The Tax Court held that a trustee's ­activities in a trade or business of a trust was work performed by an individual, and, therefore, it was possible for a trust to qualify for the Sec. 469(c)(7) exception to the treatment of rental real estate activities as per se passive activities.

Final Rules on Fiduciary Fees Are Issued

The IRS issued final regulations on the controversial question of which costs incurred by trust and estates are subject to the 2% floor on miscellaneous deductions under Sec. 67(a).

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Get your clients ready for tax season

With the extended 2017 tax filing season drawing to a close, now is the time to get your practice and your clients ready for the 2018 season.

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2016 Best Article Award

The winners of The Tax Adviser’s 2016 Best Article Award are Edward Schnee, CPA, Ph.D., and W. Eugene Seago, J.D., Ph.D., for their article, “Taxation of Worthless and Abandoned Partnership Interests.”