Distributed assets count toward $2 million determination

Article Abstract:

An estate's distributed assets will be included in the determination of eligibility for recovery of attorneys' fees and costs after prevailing in a tax dispute, according to the Seventh Circuit's decision in Estate of Woll. The recovery rule has been applied to estates despite their not being specifically included in the Equal Access to Justice Act. The Seventh Circuit held that net worth should include distributions despite the Act's position that net worth is determined at time of filing because an estate could inappropriately qualify by distributing all assets.

Commercial Banks, Trust, Fiduciary, and Custody Activities, Estate & Tax Planning, Cases, Attorneys, Lawyers' fees, Distribution of decedents' estates, Estate planning

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Transferred second-to-die policy was not in estate

Article Abstract:

Letter Ruling 9413045 holds that a second-to-die policy can be transferred from an estate within three years of the estate owners' death and not be considered part of the estate for tax purposes as long as the transfer of the second-to-die policy was a purchase by the ultimate receiver, not a gift. The estate in question had created a trust for an unrelated third party that then bought the second-to-die policy from the estate.

Taxation, Transfer taxes, Valuation, Transfer (Law), Estates (Law)

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IRS liberalizes its position on valuation of stock transferred to family members

Article Abstract:

The IRS has reversed its position, via revenue ruling 93-12, on aggregating interests based on ownership of stock in a family-owned business after a number of Tax Court and appellate court cases. The courts recognized that a familial relationship does not automatically indicate similarity of interest. This will reduce the value of gifts of stock within a family for gift tax purposes.

Securities, Family-owned business enterprises, Family-owned businesses, Stock transfer

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