Plan distributions due to sale of employer may be eligible for special tax treatment

Article Abstract:

The pension plan distributions of employees whose companies are sold may be eligible for special averaging or rollover treatment. The employees of a subsidiary are eligible for lump-sum treatment of the plan's distribution if a separation from service has occurred as a result of the sale of the subsidiary. The IRS has ruled that the distributions of workers whose jobs do not change as a result of a change in ownership will not receive special tax treatment since, under the 'in-place rule', the IRS considers that no termination of employment has occurred. Employees are eligible to select averaging or rollover treatment if their jobs change or are eliminated as a result of a change in ownership.

Analysis, Taxation, Pension funds, Qualified benefit plans, Business sale, Pension fund termination

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Death starts property disclaimer period

Article Abstract:

A taxpayer who opened a community property brokerage account and revocable trust with her husband is entitled to a period of nine months from the death of the husband to disclaim interests in these assets under Ltr. Rul. 9218015. Although the assets have been in existence for several years, the surviving spouse is given additional time to file a disclaimer since her interest in the assets was established only after the death of her husband. A qualified disclaimer invalidates the transfer of interest, causing the disclaimant irrevocably to lose any interest in property.

Case studies, Laws, regulations and rules, Estate planning, Renunciation of inheritance

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