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Crummey withdrawal notices recommended practices
  • Proskauer Rose LLP
  • USA
  • September 10 2012

Under current tax law, an individual is entitled to make gifts of up to $13,000 per donee per year without being subject to gift tax


Tax Court holds that trusteebeneficiary's power to invade trust principal for her "welfare" is limited by an ascertainable standard and trust principal not includible in her estate under IRC 2041(b)(1)(a) estate of Ann R. Chancellor, et al. v. Commiss
  • Proskauer Rose LLP
  • USA
  • September 14 2011

Frequently, trust agreements ensure that the principal invasion power held by a trustee who is also a beneficiary is limited to distributions for the beneficiary's "health, education, maintenance and support"


Malpractice claim against an estate was too uncertain to be deductible as of date of death and thus, the deduction would be based only on the amount actually paid by the estate Estate of Gertrude H. Saunders, et al. v. Comm’r, 136 T.C. No. 18 (4282011
  • Proskauer Rose LLP
  • USA
  • July 5 2011

In Saunders, a malpractice claim for $90,000,000 was filed against the decedent’s predeceased husband’s estate, alleging a breach of fiduciary duty by the decedent’s husband


Estate of Stone v. Comm'r, T.C. Memo 2012-48 (2222012)
  • Proskauer Rose LLP
  • USA
  • April 2 2012

In Stone, a recent Tax Court case, the Court determined that the transfer of undeveloped woodlands to a family limited partnership (an "FLP") was a bona fide sale, since the record established that the FLP was created for legitimate non-tax reasons


Tax Court finds that life insurance proceeds were estate tax includible on account of decedent’s retained incidents of ownership, that annuities were estate tax includible, and that estate was liable for failure to file timely penalty Estate of Coaxum v
  • Proskauer Rose LLP
  • USA
  • August 5 2011

In Coaxum v. Commissioner, the Tax Court found that the decedent retained incidents of ownership in six life insurance policies, rendering their values includible in the gross estate, that the value of the annuities owned by the decedent was includible in the gross estate, and that the estate was liable for a failure to file timely penalty


Court finds Tax Court erred when it apportioned entire value of a Manhattan brownstone to a decedent’s estate when decedent transferred 49 of the property to her son a few years before
  • Proskauer Rose LLP
  • USA
  • November 5 2010

In this case the higher court reversed a lower court's inclusion of the entire value of a real property in the Decedent's estate when the decedent had transferred a portion of the property to her son during her life


Loan interest paid by trust held non-deductible in decedent’s estate because it was unnecessary
  • Proskauer Rose LLP
  • USA
  • November 5 2010

After Decedent’s death, his trust borrowed $1.5 million from Decedent’s Foundation to pay his estate tax liabilities (aka a “Graegin” loan


Federal district court finds transfer of interests in LLC to children does not qualify for the annual gift tax exclusion Fisher v. Commissioner, No. 1:08-CV-00908 (March 11, 2010)
  • Proskauer Rose LLP
  • USA
  • May 7 2010

A U.S. District Court in Indiana found the transfer of interests in a LLC to children did not qualify for the annual gift tax exclusion because the interests were considered “future” rather than “present” interests in property due to operating agreement restrictions on the children’s rights relating to the property


8th Circuit finds limited partnership’s transfer restrictions disregarded when valuing stock for gift tax purposes - Holman v. Commissioner, 2010 WL 1331270 (April 7, 2010)
  • Proskauer Rose LLP
  • USA
  • May 7 2010

The 8th Circuit, in affirming the Tax Court, found that a limited partnership created by a couple to hold Dell stock in trust for their children could not claim that the partnership's transfer restrictions constituted a bona fide business arrangement


Tax court finds transfer of an interest in a limited partnership and timberland to an FLP was not includible in the decedent’s gross estate under Section 2036(a) because the transfer was a bona fide sale for adequate and full consideration
  • Proskauer Rose LLP
  • USA
  • March 10 2010

This Tax Court decision provides another Section 2036 victory for the taxpayer by holding that assets transferred to an FLP were not includible in the decedent's gross estate under Section 2036(a) because the transfer was a bona fide sale for adequate and full consideration