Intrafamily transfers may lessen estate and gift tax liability

Article Abstract:

Intrafamily transfers can be structured so that family members transfer property to other family members in a manner that allows them to minimize taxes and maximize family wealth, while retaining control of any property transferred. Three common methods for conducting such intrafamily transfers are private annuities, installment sales and trusts benefitting minors. Private annuities typically involve property transfer from an annuitant to an obligor, in exchange for the obligor's pledge to make fixed periodic payments to the annuitant's account. Installment sales, likewise, involve property transfers that are conducted so that related parties do not make direct gifts. In minor trusts, on the other hand, property transfers are conducted through Section 2503(c) and Section 2503(b) trusts, which are more attractive than transfers conducted under the Gifts to Minors Act.

Methods, Tax planning, Transfer taxes

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Estate freeze rules affect partnership valuation discounts

Article Abstract:

Valuation discounts for business interests can result in significant tax savings specially in the area of estate and gift tax. In filing for a discount, taxpayers can use several variables to justify such a claim, one of which is the estate freeze rules. Taxpayers who want to employ estate freeze strategies should be aware that the IRS considers the substance of specific transactions instead of their form. Chapter 14 of the Internal Revenue Code is applicable in dealing with the issue of how to support lack-of-control and lack-of-marketability discounts. However, it is aimed at blocking taxpayers from launching securities with features that appear to be organized only for freezing the estate value. Therefore, the chapter is not applicable to situations where there is only one class of stock.

Management, Taxation, Partnership, Partnerships, Valuation, Estate tax, Estate taxes, Discount (Finance), Gift tax, Estate freezing

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