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Treasury Green Book Proposal — 6166 Extensions

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 185 of the Green Book and is re-printed here for your convenience:

EXTEND THE LIEN ON ESTATE TAX DEFERRALS WHERE ESTATE CONSISTS LARGELY OF INTEREST IN CLOSELY HELD BUSINESS

Current Law

Section 6166 allows the deferral of estate tax on certain closely held business interests for up to fourteen years from the (unextended) due date of the estate tax payment (up to fourteen years and nine months from date of death). This provision was enacted to reduce the possibility that the payment of the estate tax liability could force the sale or failure of the business. Section 6324(a)(1) imposes a

Treasury Green Book Proposal — Limit Duration of GST Exemption

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 183 of the Green Book and is re-printed here for your convenience:

LIMIT DURATION OF GENERATION-SKIPPING TRANSFER (GST) TAX EXEMPTION

Current Law

GST tax is imposed on gifts and bequests to transferees who are two or more generations younger than the transferor. The GST tax was enacted to prevent the avoidance of estate and gift taxes through the use of a trust that gives successive life interests to multiple generations of beneficiaries. In such a trust, no estate tax would be incurred as beneficiaries died, because their respective life interests would die with them and thus would cause no inclusion of the

Treasury Green Book Proposal — GRATs and Other Grantor Trusts

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 180 of the Green Book and is re-printed here for your convenience:

MODIFY TRANSFER TAX RULES FOR GRANTOR RETAINED ANNUITY TRUSTS (GRATS) AND OTHER GRANTOR TRUSTS

Current Law

Section 2702 provides that, if an interest in a trust is transferred to a family member, any interest retained by the grantor is valued at zero for purposes of determining the transfer tax value of the gift to the family member(s). This rule does not apply if the retained interest is a “qualified interest.” A fixed annuity, such as the annuity interest retained by the grantor of a GRAT, is one form of qualified

Treasury Green Book Proposal — Consistency in Values

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 179 of the Green Book and is re-printed here for your convenience:

EXPAND REQUIREMENT OF CONSISTENCY IN VALUE FOR TRANSFER AND INCOME TAX PURPOSES

Current Law

Section 1014 provides that the basis of property acquired from a decedent generally is the fair market value of the property on the decedent’s date of death. Similarly, property included in the decedent’s gross estate for estate tax purposes generally must be valued at its fair market value on the date of death. Although the same valuation standard applies to both provisions, until the enactment on July 31, 2015, of the Surface Transportation and Veterans Health

Treasury Green Book Proposal — Reversion to 2009 Laws

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 177 of the Green Book and is re-printed here for your convenience:

RESTORE THE ESTATE, GIFT, AND GENERATION-SKIPPING TRANSFER (GST) TAX PARAMETERS IN EFFECT IN 2009

Current Law

The current estate, GST, and gift tax rate is 40 percent, and each individual has a lifetime exclusion of $5 million for estate and gift tax and $5 million for GST (indexed after 2011 for inflation from 2010). The surviving spouse of a person who dies after December 31, 2010, may be eligible to increase the surviving spouse’s exclusion amount for estate and gift tax purposes by the portion of the predeceased spouse’s exclusion

IRS Postpones Filing Deadline for New Basis Reporting Requirements AGAIN

ThinkstockPhotos-186176261As part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, signed into law by President Obama on July 31, 2015, Sections 1014(f) and 6035 were enacted.

Section 1014(f) provides rules requiring that the basis of certain property acquired from a decedent may not exceed the basis of that property as finally determined for federal estate tax purposes, or, if not finally determined, as reported on a statement made under section 6035.

Section 6035 imposes new reporting requirements  for the executor of an estate of a decedent where a federal estate tax return is required to be filed.  The executor must furnish, to both the IRS and to each person who holds a legal or beneficial interest in the property listed on the estate tax return,  a statement “identifying the

IRS: Transcript Can Be Alternative to Estate Tax Closing Letter

Back in August, we wrote about how the IRS would no longer automatically issue closing letters for filed Form 706, United States Estate (and Generation-Skipping Transfer) Tax Returns.  Instead, the IRS will only issue closing letters upon request by the taxpayer.

However, on December 4, the IRS updated its Frequently Asked Questions on Estate Taxes website to provide estates with an alternative to requesting and obtaining an IRS closing letter:

“Account transcripts, which reflect transactions including the acceptance of Form 706 and the completion of an examination, may be an acceptable substitute for the estate tax closing letter.”

Further, transcripts are easily available:

“Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T.”

Who’s Richer Than the 1%?

Who’s Richer Than the 1%?

September 11, 2015

Authored by: Stephanie Moll

ThinkstockPhotos-80614811Are you getting ready to write that big check to the IRS?  If so, you should be aware that the IRS is no longer accepting checks in amounts larger than $99,999,999.00.  In Internal Revenue Bulletin 2015-36, the IRS announced that, starting on January 1, 2016, the IRS will begin returning checks in amounts greater than $99,999,999.00 to the originator.  If you are one of the unlucky few who owe this much in tax (I might disagree and say you’re lucky to owe that much because how much do you have left after paying $100 million in tax?) you should be aware that you will have to send the IRS more than one check to make your payment.

IRS Postpones Filing Deadline for New Basis Reporting Requirements

ThinkstockPhotos-186176261As part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, signed into law by President Obama on July 31, 2015, Sections 1014(f) and 6035 were enacted.

Section 1014(f) provides rules requiring that the basis of certain property acquired from a decedent may not exceed the basis of that property as finally determined for federal estate tax purposes, or, if not finally determined, as reported on a statement made under section 6035.

Section 6035 imposes new reporting requirements  for the executor of an estate of a decedent where a federal estate tax return is required to be filed.  The executor must furnish, to both the IRS and to each person who holds a legal or beneficial interest in the property listed on the estate tax return,  a statement “identifying the

Estates Must Now Request Closing Letters from IRS

ThinkstockPhotos-480130649In the past, when an estate of a deceased taxpayer filed a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, the Internal Revenue Service would automatically issue an estate tax closing letter, signifying that the Return had been accepted by the IRS. At that time, the estate could be assured that, unless the estate took an action that re-opened the estate tax return to review, no additional estate tax would be imposed by the IRS.

Recently, a change was made on the IRS website that indicates this procedure has been changed. Per www.irs.gov:

When can I expect the Estate Tax Closing Letter?

For all estate tax returns filed on or after June 1, 2015,

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