Donee liability ate gift after donor extended time
Article Abstract:
Two Tax Court decisions demonstrate how donee liability is affected by extension made by the donor. In 'Ripley,' the son and daughter-in-law lost their gifts to taxes because the mother undervalued the gift she gave to another son. The court found that the notice for the tax conveyed 10 years after the gift was given was not late because the mother had consented to an extension, with the liability the full amount of the gift. In another case, known as 'Pert,' the second husband was exposed to donee liability and not allowed to contest the amount of tax because his wife had agreed to a settlement agreement to settle her joint returns she had filed with her late first husband. In the agreement, the wife agreed to extra tax liability as an individual and personal representative from the estate of her first husband.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Deathbed transfer did not create minority discount
Article Abstract:
TAM 9719006 explains that a decedent did not successfully create a minority discount to reduce her estate's size. Two days before her death, the family launched a limited partnership, with the children contributing cash in exchange for 1% general partnership interests. Just before her death, the decedent made contributions of assets to the partnership in return for a controlling interest and thereafter sold a potion of the interest to her heirs to be left with a minority interest. Minority discounts were filed on the estate tax return of the decedent for the partnership interests held by the marital and the revocable trusts. The promissory notes were also given a discounted value. The IRS challenged the discounts on two grounds. It cited the 'Estate of Murphy' case and Sec 2703(a)(2).
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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Post-transfer conditions do not affect value
Article Abstract:
The US Tax Court has ruled in the Citizens Bank and Trust Co case that stock that is transferred into a trust upon death of the holder is to be valued as of the moment before transfer for estate tax purposes. The IRS will allow a 20% estate tax discount for lack of marketability. The court did not rule as to whether restrictions in the stock transfer instrument would be ignored in all instances nor as to how long a restriction in a transfer instrument would be allowed to depress stock value.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
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