Coordinating buy-outs and installment payment of estate tax

Article Abstract:

Both buy-out agreements and IRC section 6166 are designed to prevent required liquidation of a closely held business to pay estate taxes. However, the buy-out agreement must be carefully written to prevent the early acceleration of installment estate tax payments under section 6166 because of provisions ending the payment extension when 50% of the assets involved are sold. Business continuity is not supported when the buy-out agreement allows purchase by promissory note because the tax payments are accelerated but no funds are available.

Commercial Banks, Trust, Fiduciary, and Custody Activities, Estate & Tax Planning, United States, Interpretation and construction, Taxation, Close corporations, Closely held corporations, Estate tax, Estate taxes, Buy-sell agreements

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Maximizing the use of the state death tax credit

Article Abstract:

Estate planners should know how to use state death tax credits to offset the Federal estate tax imposed on married couples. The most common death tax scheme, used by 27 states and the District of Columbia, involves an estate tax equal to the maximum allowable state death tax credit on the Federal estate tax return. IRC Section 2011(a) provides for a credit for state death taxes. Planners should remember that availability of the tax credit may be determined when the state death taxes are paid.

Tax credits

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Prop. Regs. address adjustments and lapsing rights

Article Abstract:

The IRS issued the second group of Proposed Regulations under Chapter 14 on Sep 10, 1991. These regulations deal with the treatment of lapsing rights and the avoidance of double transfer taxation through adjustments related to retained interests. The regulations also waive certain restrictions on partnership or stock interests.

Tax planning, Special use valuation (Taxation)

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