New estate freeze approach uses old valuation rules
Article Abstract:
Congress has repealed confusing tax regulations covering estate freeze transactions, and has adopted gift valuation rules in its stead. Estate freezes separate property into income and control interests which are retained by older generations, and appreciation and future growth rights, which are transferred to subsequent generations. Techniques for affecting estate freezes include partnership freezes, GRITS, and stock recapitalizations. The Revenue Reconciliation Act of 1990 has replaced former rules with a new Chapter 14 for the Internal Revenue Code. The new rules, Sections 2701 to 2704, apply to estate freezes created after Oct 90. The new approach levies a gift tax valuation on the initial transfer in place of the estate tax approach contained in Section 2036(c).
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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How to establish separate lines of business
Article Abstract:
The IRS has issued Proposed Regulations defining the rules for businesses that maintain different structures for retirement benefits for employees in separate lines of business (SLOBs). The Proposed Regulations are the last regulations concerning qualified plans emanating from the Tax Reform Act of 1986 to be issued. The Proposed Regulations are complex and use a comparability of benefits approach that requires a great amount of recordkeeping by employers. Employers must show that its business lines are maintained and operated separately from one another, determine which lines of business are SLOBs, and allocate the number of employees for each SLOB.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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Real estate reporting expanded by new regs
Article Abstract:
New Internal Revenue Code Regulation 1.6045-4 expands the reporting requirements on real estate transactions with closing dates after 1990. The regulation also defines the classes of real estate transferors and transactions that are exempt from reporting. The new regulation requires reporting for any real estate transaction. Reportable real estate includes land, permanent structures, condominiums, and stock in cooperative housing corporations. No reporting is required by corporations defined under Section 7701(a)(3) or 7704(a), or by corporations, volume transferors, and government units covered by Reg 1.6045-4(d).
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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