Contingent power resulted in inclusion of property in estate

Article Abstract:

The Tax Court held, in Estate of Kurz, that property over which the decedent had a general power of appointment subject to contingencies was includable in the decedent's estate as long as the contingency did not have significant non-tax consequences. The decedent was allowed to control 5% of a family trust when and if her marital trust was expended. The decedent died with nearly $3.5 million in the marital trust and so did not use the contingency. Though the Tax Court's findings were accurate, the logic of non-tax consequences was based on a faulty interpretation of IRC section 2041.

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Stock subject to sale to third party failed to qualify for QTIP treatment

Article Abstract:

The US Court of Federal Claims held in the Estate of Rinaldi that whether an income interest qualifies for qualified terminable interest property (QTIP) treatment is to be determined at the date of election rather than date of death, and the testator's intent must be considered. In Rinaldi, the will creating the potential QTIP trust clearly provided for the possibility that the income interest would terminate, therefore invalidating it for QTIP treatment. Selling the property at issue prior to the election, was additional evidence the IRC section 2056 requirement was not met.

United States, Third parties (Law), Qualified terminable interest property, Qualified terminable interest property trusts, Stock transfer, Marital deduction

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Fourth Circuit confirms that noncharitable gifts by check were complete in year of delivery

Article Abstract:

The Fourth Circuit held in Metzger that noncharitable gifts in the form of checks may be declared for the year in which the check was given to the donee, even if the check clears the bank in the next year. A clear intent on the part of the donor to avoid gift taxes by limiting gifts to $10,000 per donee per year, coupled with the fact that he never wrote more than one $10,000 check-per-donee-per-year, made the court's decision to rely on the relation-back doctrine an easy one. Case history is discussed.

Accounting and auditing, Gifts, Gift tax

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