Reciprocal trust doctrine applied

Article Abstract:

The authors discuss the Tax Court 1999 memorandum case Sather where the court applied the reciprocal trust doctrine to deny gift tax exclusions in a case where sets of aunts and uncles transferred stock to their siblings' children through reciprocal trusts.

Tax Management, Tax accounting, Tax exclusion

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Excessive trustees' fees deemed a gift

Article Abstract:

The author discusses IRS Technical Advice Memorandum 200014004, which provides guidance on excessive fees taken by the children of a decedent from a QTIP trust for the benefit of their mother. The excessive fees were considered a taxable gift by the mother.

Finance, Trusts and trustees, Trustees, Trusts (Law), Qualified terminable interest property, Qualified terminable interest property trusts

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Statute's repeal results in gift tax refund

Article Abstract:

A US District Court in Pennsylvania in Neal held that the retroactive repeal of IRC section 2036(c) operated to entitle the taxpayer trust grantor to a gift tax refund. The taxpayer had released reversionary interests and paid gift tax on a grantor retained income trust (GRIT) due to the possibility of the trust being included in her gross estate, in reliance on former section 2036(c). The court found that the mistake of law doctrine and other principles controlled to deny the IRS the right to retain the tax paid.

Estate Planning, Cases, Influence, Tax refunds, Repeal of legislation, Repeal (Law)

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