Can you defer the payment of estate tax?

According to Internal Revenue Code Section 6166, a personal representative (PR) may defer payment of federal estate tax if the decedent’s equity interest in a closely held business exceeds 35 percent of his adjusted gross estate. In order to be eligible for a Section 6166 election, the closely held business must qualify as an active …

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The Estate or Gift Tax Return is Filed with the IRS – Then What?

I attended the American Society of Appraisers Advanced Business Valuation Conference a couple of weeks ago and had the opportunity to attend a session presented by an IRS attorney, Theresa Melchiorre. I always jump at the chance to hear an IRS presenter, as I like to get a glimpse of what goes on behind the …

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99.7% of Estates Are Not Subject to Federal Tax

The American Taxpayer Relief Act of 2012 (“Act”) increased tax exemptions for federal estates, gifting and generation skipping trusts (GST). The Act also escalated the aforesaid exemptions each year for inflation. Below is a summary of the 2015 status of the three exclusions along with the ceiling for the federal estate tax rate applicable to …

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Qualified Personal Residence Trusts

GIFT YOUR RESIDENCE TO YOUR BENEFICIARIES DURING YOUR LIFETIME, CONTINUE TO RESIDE IN IT AND SAVE TAXES WHAT IS A QPRT? A qualified personal residence trust (QPRT) is a trust typically designed to transfer a primary residence (*) to your beneficiaries during your lifetime which, if you elect, permits you to serve as the trustee. …

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Estate & Gift Tax Valuations: Can the IRS Disregard an Agreed Upon Value for Shares in a Buy-Sell Agreement?

Section 2703 of the Internal Revenue Code enacted in 1990 states that buy-sell agreements are disregarded for valuation purposes, unless the agreement satisfies the following tests. Test One: The Agreement Must Constitute a Bona Fide Business Arrangement The buy-sell agreement (Agreement) cannot be a ploy to transfer shares to members of the family at a …

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Avoid An IRS Audit When Filing A Gift Tax Return

Adequate Disclosure Rules Applicable to Gifts Reported on Form 709 Internal Revenue Code Section 6501(c)(9) places a time limit of three years on the revaluation of gifts as long as adequate disclosure rules are met or satisfied. However, be aware that if the IRS challenges the valuation during the limitation period, the taxpayer’s opportunity to …

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Are Family Discounts Disappearing Soon?

At least two writers believe so.*  The Obama Administration released its proposed budget for fiscal 2014 on April 10. The proposal contains a number of changes impacting estate planning which are described in the General Explanations of the Administration’s Fiscal Year 2014 Revenue Proposals (the “Greenbook”) issued by the Treasury Department. Previous issues of the …

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Legislation Governing Lifetime Gift & Estate Tax Exclusions has Changed Seven Times in Last Ten Years

Although The Tax Relief Act of 2012 provides permanent lifetime gift and estate exclusions of $5.25 million, legislation governing exclusions has changed seven times in the last ten years. Consequently, persons with sizeable estates who did not take advantage of their entire exclusion prior to December 31, 2012 should sit down with their professional advisors …

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