Taxpayer Relief Act of 1997 reduces top rates on capital gains taxes and makes major changes to estate, gift, generation-skipping transfer and home sales taxes

Article Abstract:

The Taxpayer Relief Act of 1997 changed income, gift, estate and generation skipping transfer taxes in significant ways. The most far-reaching changes are to the capital gains tax rules governing the change in primary residence ownership. Changes to the gift, estate, and generation-skipping transfer taxes will benefit taxpayers of means, mainly those who own closely held businesses. The call for estate and gift tax reform came largely from a concern that family businesses would be endangered by huge inheritance taxes.

Capital gains tax, Generation-skipping transfer tax, Real property tax, Real property taxes, Inheritance tax

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Gifts of nonvested employee stock options are not completed gifts for estate and gift tax purposes

Article Abstract:

The IRS ruled in Revenue Ruling 98-21 that completed gifts do not result from the transference of nonvested stock options from executives to family members directly or through trusts. Gifts become complete for practical purposes when vesting occurs because the ruling requires unconditional donee rights to exercise the options. The effective requirement of vesting can result in estate planning issues arising from substantial appreciation.

Tax Law, Public Finance Activities, Gifts, Employee stock options

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