Economic reality in estate planning: the remainder interest sale - revitalized and ready for action

Article Abstract:

The US Court of Appeals for the Third Circuit correctly interpreted IRC section 2036's application to remainder interest sale transactions in Estate of D'Ambrosio. The Third Circuit overturned the Tax Court's ruling, finding that the lower court had failed to limit the consideration requirement to the remainder interest being transferred. It is promising that the Third Circuit accepted an estate planning arrangement based on economic reality and did not try to recharacterize such transactions.

Cases, Remainders (Estates)

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Welfare benefit plans in estate planning: people in glass houses shouldn't throw stones

Article Abstract:

Estate planners should be aware of the types and uses of welfare benefit plans which are funded by life insurance. Employer provided plans have the benefit of deductibility of premiums. Severance and death-benefit-only are two types of legitimate plans which still must be examined by practitioners due to possible shady sales tactics. Plans sold with representations of IRC section 501(c)(9) deductibility or IRS compliance should be particularly scrutinized.

Tax Law, Public Finance Activities, Usage, Finance, Life insurance, Executives, Employee benefits

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Rev. Rul. 98-12 and Rev. Proc. 98-34: the IRS on gifts of employer stock options

Article Abstract:

Gifts of employer stock options increased after 1996 due to changes in SEC regulations which reduced transfer barriers. Valuation-related tax complications and creative planning techniques resulted in IRS Revenue Ruling 98-21 and Revenue Procedure 98-34 which provide valuation guidance. The guidance is unfortunately and obviously legally incorrect.

Securities, Valuation, Generation-skipping transfer tax, Employee stock options

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