Glossary of Estate Planning - Federal case law
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- Consideration furnished rule applies to joint property held by spouses obtained prior to 1977 (otherwise 50/50).
MA may not follow Gallenstein.
- United States v. Allen
293 F.2d 916 (1961)
- Full and adequate consideration to avoid 2035 (a) means an amount equal to what would be includable if no transfer were made
- Silverman rule
- In case of 3 year rule, if multiple people contribute to property, it is included pro rata between them.
- Said that you could create zeroed out GRATs
- McCord v. Comm'r
120 T.C. 358 (2003)
Appeal to 5th circuit
- You can allocate a gift of discounted FLP interests to charity based upon a defined value (i.e., a percentage based upon the value of the property as finally determined for gift tax purposes).
- Atkinson v. Comm'r
115 T.C. 26 (2000)
- If a CRAT is included in the Grantor's estate because of a failure to make annuity payments, no charitable deduction is available.
- United States v. Estate of Grace
395 U.S. 316 (1969)
- Reciprocal trust doctrine
- Miller v. Comm'r
71 T.C.M. 1674 (1996)
- Provides guidelines as to how one distinguishes a loan from a gift
- Estate of Rosen v. Comm'r
T.C. Memo 2006-115
- Strangi II
T.C. Memo 2003-145
- IRS included an FLP in a donor's estate on the basis of 2036 (a)(1), and PERHAPS 2036 (a)(2)
- Kimbell v. United States
244 F. Supp. 2d 700 (2002)
- Bona fide sale exception of 2036 applies, because the decednet received a pro rata FLP interest and the transaction was not a sham or disguised gift
- Estate of Bongard v. Comm'r
124 T.C. 95 (2005)
- LLC was upheld.
- Estate of Blount v. Comm'r
428 F.3d 1338 (2005)
- Disregarding expert's conclusion that a buy-sell method and result were comparable to other companies where conclusion ignored the nonoperating assets held by the business
- Gifted FLP interests needed to give a present interest to donees to benefit from annual exclusion.
- When state law has federal tax implications it must be resolved by highest court in state to be binding on IRS.
- Wilson v. Bowers
57 F2d 682 (2d Cir. 1932)
Lomb v. Sugden
82 F.2d 166 (2d Cir. 1936)
- Set forth 4 of the 6 requirements for the agreement price in a buy sell agreement to be respected by the IRS
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