Tax Management Estates, Gifts and Trusts Journal 1997: Vol 22 Index

17 Pages·1997·6.6 MB·English

|B oard of Index Editors: Enid Zafran, Esq., | FILE this index behind the Index tab in the Estates, Gifts
Director ;M ichael G. Bernier, Esq., } and Trusts Journal Binder. DISCARD or RECYCLE |
| Manager, Nancy J. Emison, Esq., Index 1997 Semi-Annual Index. RETAIN all other previous |
-Ed itor Indexes
TAX MANAGEMENT
ESTATES, GIFTS AND TRUSTS JOURNAL
1997 ANNUAL INDEX
How to Use This Index
This topical index provides references to all material in the 1997 TAX MANAGEMENT ESTATES, GIFTS AND
TRUSTS JOURNAL. Entries are followed by page citations.
This index is arranged alphabetically, word-by-word. For example, the heading GIFT TAX precedes the heading
GIFTS. Numbers are treated as if spelled out, e.g. an entry starting with “1997” will appear in the “Ns.”
Editor’s Notes [Ed. Note:] clarify the scope of a particular heading and where appropriate refer the user to related
headings.
This index publishes at 6-month intervals, cumulating to a 12-month final.
See also the TABLE OF AUTHORS, TABLE OF CASES, and TABLE OF IRS DECISIONS AND RULINGS,
at the end of this Index.
A Revocable trust counts in d Inflation indexing, Taxpayer Relief Act of
worth of estate in qu abiding for awm nt of | 1997, 191
ACCELERATED DEATH BENEFITS attorneys’ fees (DC NOhio), 32 | Prearranged understanding
Incliofme e instuaxr anrcuel es polrieclya,x edH IPfoAr A ben1e9f9i6t,s 4p aid on || ASLeIeE NNSO N-RESIDENT ALIENS | —Farfoiirgl,h ut,re xec lpursetioao rnr eaxdenergnceiimeseden t( CTrAduMem)em,m eeyd3 3; oawnniltay l hysdirrsea,aw sao6ln2
ACCUMULATION TRUSTS et seq.; IRS use of prearranged understand-
ALIMONY ing concept exa amined, 134 et seq
Interest rate for distributions from non-grantor
foreign trusts increased, SBJPA 1996, 8 | Arrearages deemed IRD reportable on estate’s | —Kohlsaat Est., contested annual exclusions
Throwback rules, repeal for domestic trusts, income tax return and taxable to beneficiar- allowed, 223 et seq
195 ies under DNI conduit rules (CA 10), 109 Secondary beneficiaries of Crumme} trusts, ex-
clusions denied (TAM), 269
ALLOCATION AND APPORTIONMENT
ACTUARIAL ASSUMPTIONS See also ADMINISTRATIVE EXPENSES ANNUITIES
See ANNUITIES Charitable remainder unitrust, NIMCRUT | See also DISTRIBUTIONS, PENSION &
may allocate capital gains to income if ad- PROFIT-SHARING PLANS
ADMINISTRATION OF ESTATES justment made in make-up distributions | Actuarial tables may not be used to v alue, Final
See EXECUTORS (PLR), 7 Regs., 15 et seq
| Estate taxes apportioned to marital share re- GRATs. See GRANTOR RETAINED AN-
ADMINISTRATION OF TRUSTS duce marital deduction due to family integra- | NUITY TRUSTS (GRATs)
See also TRUSTEES tion of will and revocable trust (DC Kan), 29 | Private annuities. See PRIVATE ANNUI-
Life insurance trusts. See LIFE INSURANCE | Unclear will provision favors equitable appor- | TIES
TRUSTS tionment of estate taxes, QTIP property not | Special valuation rules. See ESTATE
Revocable trusts, election to treat as part of | subject to (CA 6), 27 FREEZES
estate, 195
| ALTERNATE VALUATION DATE | APPOINTMENT POWERS
ADMINISTRATIVE EXPENSES | Lottery winnings properly valued as of dece- | See POWERS OF APPOINTMENT
See also ALLOCATION AND APPORTION- | dent’s death with adjustment for difference | See es
MENT at alternative valuation date due to change in | APPORTIONMENT
Estate tax deduction requires that expenses AFR (TAM), 22 |S ee — ATION AND APPORTION-
must be “actually and necessarily incurred” MEN
(CA 6), 266 ANNUAL GIFT TAX EXCLUSION iain
Marital and charitable estate tax deductions re- Agent of principal, gifts under power of attor-
duced by expenses paid from principal, but ney allowed, gifts by guardians denied | See also VALUATION; VALUATION OF
not those paid from income (US SupCt; rev (TAMs), 266 CLOSELY-HELD CORPORATION
grant), 28; payment from income allowed un- Crummey withdrawal powers STOCK
less material limitation on right to receive —Prearranged understanding. See Prearranged | Private annuities, 127
(dec), 146; analysis of decision, 167 et seq. understanding, this heading
Mismanagement and self-dealing, beneficiaries’ —Qualification for annual exclusion (US | APPRECIATED PROPERTY
expenses for suit to remove executors not de- TCM), 186 See also ESTATE FREEZES
ductible from estate’s income under §212 —Right not sufficient for power to constitute Charitable gifts to private non-operating foun-
(US TCM), 6 present interest under §2503(b), exclusion dations, deduction limited to donor’s basis,
Pecuniary legacies, statutory interest on ruled denied (AOD), 33; analysis, 62 et seq.; IRS limited exception for publicly-traded securi-
not necessary to estate administration and use of prearranged understanding concept ex- ties, SBJPA 1996, 5; extended by Taxpayer
not deductible (TAM), 26 amined, 134 et seq. Relief Act of 1997, 198
Copyright © 1998 Tax Management Inc., a Subsidiary of The Bureau of National Affairs, inc., 1231 25th Street, N.W., Washington, D.C. 20037
0886-3547/98/$0 + $1.00
ART
2 TAX MANAGEMENT
APPRECIATED PROPERTY —Contd. Life insurance owned by corporation to fund —Multiple grantors causes trust to be reclassi-
Foreign trusts and estates, gain recognition up- purchases under agreement not included in fied as association taxable as corporation
on transfer by U.S. persons to, §684, 197 shareholder’s estate (PLRs), 24 (PLR), 7
Section 644 tax on gain from sale or exchange Tax-free life insurance proceeds converted into —Net-income method trust, sample document,
of property, repealed by Taxpayer Relief Act taxable IRD (US TCM), 10 56 et seq.
of 1997, 195 Unrelated persons’ agreement rejected as “de- —NIMCRUT may specifically allocate capital
vice’”’ to transfer value (US TCM), 21 gains to income if proper adjustment made in
ART make-up distributions (PLR), 7
Charitable gifts, “Statement of Value” avail- Cc
able to substantiate value for (RP), 5 “CHECK-THE BOX” REGULATIONS
CAPITAL GAINS AND LOSSES Business trusts, effect on use of for estate plan-
ASCERTAINABLE STANDARD ning, 83 et seq.
Appreciated property gifts. See APPRECIAT-
See generally POWERS OF APPOINTMENT ED PROPERTY CHECKS
Charitable remainder unitrusts (CRUTs)
ASSET PROTECTION PLANNING Gifts to non-charitable donee complete upon de-
See ESTATE PLANNING —Net-income method trust, sample document, posit by donee (RR), 73
56 et seq.
ASSET PROTECTION TRUSTS —NIMCRUT may allocate capital gains to in- CHILDREN
See FOREIGN TRUSTS AND ESTATES come if adjustment made in make-up distri- CRUT distributions to trust for minor child al-
butions (PLR), 7 lowed even though subsidiary trust could ac-
ATTORNEY, POWER OF Equitable recoupment doctrine cannot be used cumulate income and principal (PLRs), 7
See POWER OF ATTORNEY to increase refund of overpaid capital gains IRA qualification for marital deduction with
tax (US TC), 31 QTIP trust corpus preserved for children
ATTORNEYS’ FEES Private annuities used to offset capital losses, (PLR), 107
See ADMINISTRATIVE EXPENSES
Related persons treatment of executors and CHOICE OF LAW
B beneficiaries, 196 Estate planning, avoidance of surviving spouse’s
elective share claims, 241
BANKRUPTCY CASUALTY LOSSES
IRS’ failure to respond to executor’s request for Estate income tax deduction, related persons CIVIL TAX PENALTIES
prompt assessment raised bank’s mortgage treatment of executors and beneficiaries, 196 See PENALTIES
lien superior to IRS lien (CA 9 BAP), 31
CHARITABLE CONTRIBUTIONS CLASSIFICATION OF BUSINESS ENTI-
BASIS Appreciated property given to private non-oper- TIES
Appreciated property charitable gifts to private ating foundations, deduction limited to do- See also PARTNERSHIPS
non-operating foundations, deduction limited nor’s basis, limited exception for publicly- “Check-the box” rules, effect on use of business
to donor’s basis, limited exception for public- traded securities, SBJPA 1996, 5; deduction trusts for estate planning, 83 et seq.
ly-traded securities, SBJPA 1996, 5; extend- extended, Taxpayer Relief Act of 1997, 198
ed by Taxpayer Relief Act of 1997, 198 Art and collectibles, “Statement of Value” CLOSELY-HELD CORPORATIONS
Partner's basis in partnership interest adjusted available to substantiate value for gifts of Business trusts. See BUSINESS TRUSTS
to reflect share of charitable gifts by partner- (RP), 5 Buy-sell restrictions on gift of stock does not
ship (RR), 6 Charitable remainder trusts. See CHARITA- affect availability of marital deduction
S corporations, basis reduced on shares ac- BLE REMAINDER TRUSTS (PLR), 39
quired from decedent to reflect IRD, SBJPA Estate tax deduction, administrative expenses Estate freezes. See ESTATE FREEZES
1996, 11 paid from principal, but not those paid from Special use real property valuation. See SPE-
Step-up of 100 percent allowed for basis of pre- income, reduce deductions (US SupCt; rev CIAL USE REAL PROPERTY VALUA-
1977 tenancy by the entirety property (DC grant), 28; expenses may be paid from in- TION ELECTION, §2032A
WDVa, DC Md), 23; Va. decision affirmed come unless material limitation on right to Taxpayer Relief Act of 1997
(CA 6), 227 receive income (dec), 146; analysis of deci- —Elective exclusion from gross estate for quali-
BENEFICIARIES Parstinoenr, ’s1 67b aseits seiqn. partnership interest adjusted f1i9e2d family-owned businesses, new §2033A,
See also TRANSFEREE LIABILITY
to reflect share of charitable gifts by partner- —Inflation indexing of $1 million ceiling, 191
Estate administration expenses. See ADMIN- ship (RR), 6 —Interest reduced on deferred estate tax for
ISTRATIVE EXPENSES Reporting requirements, Taxpayer Relief Act small and family-owned businesses, 193
Foreign trusts, reporting by U.S. beneficiaries, of 1997 modifications, 194 —Modifications re cash lease under §2032A to
264 Substantiation requirements for gifts over $50 family members, perfection of defective elec-
Income tax reporting requirements, consistent and quid pro quo gifts over $75, Final Regs. tions, 193
treatment, Taxpayer Relief Act of 1997, 196 (TD), 5 Valuation of stock. See VALUATION OF
Related persons to executors, §267(b) treat- CLOSELY-HELD CORPORATION
ment, 196 CHARITABLE FOUNDATIONS STOCK
Release of power to request income distribu- See PRIVATE FOUNDATIONS
tions has no gift tax implications (PLR), 267 COLLECTIBLES
Special use election. See SPECIAL USE RE- CHARITABLE INCOME TRUSTS Charitable gifts, “Statement of Value” avail-
TAILO N,P R§O2P0E32RAT Y VALUATION ELEC- See CHARITABLE REMAINDER TRUSTS able to substantiate value for (RP), 5
COLLECTION OF TAX
BEQUESTS CHARITABLE ORGANIZATIONS
QDOTs, requirements and procedures, Final
Disclaimers. See DISCLAIMERS S corporation shareholders, SBJPA 1996, 13 Regs. , 26
Pecuniary bequests. See PECUNIARY BE-
QUESTS CHARITABLE REMAINDER TRUSTS COMMUNITY PROPERTY
Minimum 10 percent remainder interest, 198 See also JOINTLY-OWNED PROPERTY
BUSINESS TRUSTS Unitrusts (CRUTs) Characterization of decedent’s property chal-
“Check-the box” rules, effect on use of for es- —Distribution of qualified plan assets to NIM- lenged by IRS (US TCM), 111
tate planning, 83 et seq. CRUT creates no current taxable income QPRT may be funded by community property
Electing Small Business Trusts. See ELECT- (PLR), 7 interest in residence (PLR), 49
ING SMALL BUSINESS TRUSTS —Distributions to second trust with sole func- Qualified employee benefit plans, QTIP marital
(ESBTs) tion of receiving and administering distribu- deduction, qualification of non-participating
Estate planning techniques, 83 et seq. tion disqualify first unitrust (PLR), 143 spouse’s annuity interest, Taxpayer Relief
—Estate freeze rules, 91 —Flip unitrusts Act of 1997, 197
—PLR 9710021, first ruling on planning impli- ——Analysis of, 255
cations of use of business trust, 221 ——Definition, 254 COMMUNITY TRUSTS
—Statutory overview, 84 et seq. ——Qualifying requirements, 254 Pooled income funds may be created by (RR),
BUY-SELL AGREEMENTS ——H—iSsetcotriicoanl 6b6a4c kgPrrooup.n d,R eg2s5.3, impact of, 255 6
Closely-held stock, restrictions on gift of stock —Minor child, distributions to trust for allowed COMPLEX TRUSTS
does not affect availability of marital deduc- even though subsidiary trust could accumu- See DISTRIBUTIONS, ESTATES AND
tion (PLR), 39 late income and principal (PLRs), 7 TRUSTS
EST
ESTATES, GIFTS AND TRUSTS JOURNAL — 1997 ANNUAL INDEX 3
CONSTITUTIONAL LAW DISABLED PERSONS eficiaries under DNI conduit rules (CA 10),
Estate tax, retroactive increase in rate from 50 Certification of disability, extension of time to 109
to 55 percent held constitutional file granted under Regs. (PLR), 45
—(CA 3), 229 Marital deduction disallowed if spouse’s inter- DNI
—(DC EPa), 15 est may be limited upon incompetency See DISTRIBUTABLE NET INCOME
(TAMs), 70 (DN])
CONTEMPLATION OF DEATH
See GIFTS WITHIN 3 YEARS OF DECE- DISCLAIMERS DOWER AND CURTESY INTERESTS
DENT’S DEATH Prop. Regs. detailed , 37 Premarital agreement, surviving spouse’s waiv-
Reformation of defective GRIT results in taxa- er of in exchange for promise of life estate
CONTROL PREMIUMS ble gift, tax on disclaimed reversionary inter- does not create deductible claim against dece-
See VALUATION OF CLOSELY-HELD est not refundable when interest reinstated dent’s estate (CA 2), 25
CORPORATION STOCK (DC Nind), 38
COOPERATIVES Rigphrto petrot ya cceripgth t,o r tdaixspcalyaeirm wbheqou esdti scnloati mteadx abblee- E
Stock of cooperative association and related quest had no property right to which tax lien
lease qualify as personal residence for QPRT could attach (CA 5), 268 EASEMENTS
purposes (PLR), 50 Surviving spouse’s elective share rights, 246 See QUALIFIED CONSERVATION EASE-
Trust qualifies as QSST but GST tax effective MENTS
COPYRIGHTED WORKS date protection forfeited (PLR), 13; 44
Rights to payments under licensing agreements EDUCATION EXPENSES
accrued before death ruled IRD, accrued af- DISCOUNTS Gift tax treatment of contributions to qualified
ter death deemed not IRD (PLR), 11 | Closely-held stock. See VALUATION OF state tuition plans and education IRAs, Tax-
CLOSELY-HELD CORPORATION payer Relief Act of 1997, 195
CORPORATIONS | STOCK
CloHsEelLyD- helCdO RcPoOrpRoAraTtiIoOnsN.S See CLOSELY- | Frarcitgihotn ailn-tienrteesrtes sti n dsiasmceo untasss etosf aQlTlIoPwe d andde spoiutte- EL(EECSBTTIsN) G SMALL BUSINESS TRUSTS
S corporations. See S CORPORATIONS inclusion of both in gross estate (CA 5), 18 Created by Small Business Job Protection Act
ValVuaAtLioUnA ToIf OclNo selOyF-h eCldL OcSorEpLorYat-iHonE LsDto ck.C ORSe-e || Minority and lack of marketability discounts of 1996, 109
allowed for general partnership interest de- “Sprinkling” grantor trusts, use as S corpora-
PORATION STOCK spite right of withdrawal (US TCM), 19 tion shareholders compared, 109
| Private annuities, valuation discount rates, 126
COSTS AND FEES
Promissory note with sound obligor and unusual ELECTIONS
See ADMINISTRATIVE EXPENSES } payment schedule, value based on discounted See SPECIAL USE REAL PROPERTY VAL-
CUnRiEfiDeIdT Se staAtGe AIaNndS T gifTt AXtaExS credit. See UNI- v2a1 lue of anticipated cash flow (DC SMiss), EleUctAiTveI OsNh areE LeEsCtaTtIe ONpl,a nni§n2g0. 32AS ee ESTATE
§F2I0E1D0 ESTATE AND GIFT TAX CREDIT, ||} DISTRIBUTABLE NET INCOME (DNI) QTIPPL. ANSeNeI NQGU ALIFIED TERMINABLE IN-
CROSS-PURCHASE AGREEMENTS || Aliesmtoantey’ s arirnecaormaeg est ax dereetmuerdn aInRdD tarxeapbolret abtol eb eno-n QuaTliEfRiEedS Tf unePrRalO PtEruRstTs,Y Tax(pQaTyIePr) Relief Act of
See BUY-SELL AGREEMENTS eficiaries under DNI conduit rules (CA 10), 1997, 196
109 Revocable trust treatment as part of estate, 195
CRUMMEY TRUSTS |S eparate share rule, 196 65 day rule for trust distributions, extension to
Annual gift tax exclusion. See ANNUAL || DISTRIBUTIONS, ESTATES AND TRUSTS || estates, Taxpayer Relief Act of 1997, 196
GIFT TAX EXCLUSION
History of Crummey powers, 62 et seq.; 134 et Autnhoto ritzaexdab len one-xpcrhoa nrgaet a (dPiLsRtr)i,b ut1i1o n by trustee EMPLOYEE BENEFITS
seq. See DISTRIBUTIONS, PENSION & PROF-
Intent and Crummey power, 134 et seq. Beneficiary’s release of power to request income IT-SHARING PLANS
distributions has no gift tax implications
Life insurance trusts, withdrawal rights, 216 (PLR), 267 EQUITABLE RECOUPMENT
CSeReU TCsH ARITABLE REMAINDER TRUSTS, Chaoarndidmt ianbtirlusest te rrewiimntaghi ndsdoeilres trtfirubunusctttsii oondn i stodrfii sbrqueutcaieloiinvfsi yn gto fsaierncsd-t | Capuisteadl tgo aiinnsc reaansde lroesfsuens,d doofc torvienre paicda nnocatp itable
subheading: Unitrusts (CRUTs) unitrust (PLR), 143 gains tax (US TC), 31
SCeUeR TDEOSWYE R INATNERDE SCTUSR TESY INTERESTS | CRlUoTwe d diesvterni butthiooungs h tos utbrsuisdt iafroyr mtriunsotr ccohuilldd aacl-- ESBTs
cumulate income and principal (PLRs), 7 See ELECTING SMALL BUSINESS
D IRA distributions. See INDIVIDUAL RE- TRUSTS (ESBTs)
TIREMENT ACCOUNTS (IRAs)
DEATH BENEFITS Separate share rule, Taxpayer Relief Act of ESTATE ADMINISTRATION
Income tax rules relaxed for accelerated bene- 1997, 196 See ADMINISTRATIVE EXPENSES; EX-
fits paid on life insurance policy, HIPAA 65 day rule, §663(b) election, 196 ECUTORS
1996, 4 Stub income need not be paid to surviving
spouse’s estate for trust to qualify for QTIP ESTATE FREEZES
DEATH TAXES treatment (CA 11), 28 See also ESTATE PLANNING; RETAINED
See ESTATE TAX; GENERATION-SKIP- LIFE ESTATES, §2036
PING TRANSFER TAX (GST TAX) DISTRIBUTIONS, PENSION & PROFIT- Business trusts, 91
SHARING PLANS Buy-out rights contained in QTIP trust and will
DECEDENTS Charitable remainder unitrusts, distribution of rejected (TAM), 50
IRD. See INCOME IN RESPECT OF DECE- qualified plan assets to NIMCRUT creates Family limited partnership ignored for estate
DENT (IRD) no current taxable income (PLR), 7 tax valuation purposes under §2703 (TAM),
Death benefits kept separate in rollover IRA 144
DEDUCTIONS not added to spouse’s benefits for excess ac- GRATs. See GRANTOR RETAINED AN-
See specific type of deduction, e.g. MARITAL cumulations tax purposes (PLR), 30 NUITY TRUSTS (GRATs)
DEDUCTION (ESTATE TAX) Estate tax, QTIP marital deduction, communi- Non-qualified stock options fall outside §§2701
ty property annuity qualification for qualified and 2703 (PLR), 46
DEFERRED CHARITABLE GIFTS retirement plans, Taxpayer Relief Act of QPRTs. See QUALIFIED PERSONAL RESI-
See CHARITABLE REMAINDER TRUSTS 1997, 197 DENCE TRUSTS (QPRTs)
Excess retirement accumulations, additional es- Technical corrections to special valuation rules,
DEFERRED INCOME tate tax, repeal, Taxpayer Relief Act of 1997, SBJPA 1996
IRAs. See INDIVIDUAL RETIREMENT 197 —Section 2701, 46
ACCOUNTS (IRAs) —Section 2702, 47
DIVORCE Transfer of shares to new family shareholders
DEFICIENCIES Alimony arrearages deemed IRD reportable on terminates protection of effective date rules
See LIENS estate’s income tax return and taxable to ben- (PLR), 50
EST
4 TAX MANAGEMENT
ESTATE PLANNING Family reverse split-dollar life insurance plans, EXECUTORS
See also ESTATE FREEZES; EXECUTORS favorable treatment given (PLR), 35 See also FIDUCIARIES
Asset protection trusts. See FOREIGN Gifts within three years of death. See GIFTS Administrative expenses. See ADMINISTRA-
TRUSTS AND ESTATES WITHIN 3 YEARS OF DECEDENT’S TIVE EXPENSES
Basis of pre-1977 tenancy by the entirety prop- DEATH Definition of, 96
erty allowed 100 percent step-up (DC GST tax. See GENERATION-SKIPPING Gifts, personal representative of taxpayer es-
WDVa, DC Md), 23; Va. decision affirmed TRANSFER TAX (GST TAX) topped from changing selected form based on
(CA 6), 227 Interest reduced on deferred tax for small and substance of transaction (US TCM), 34
Business trusts. See BUSINESS TRUSTS family-owned businesses, Taxpayer Relief QTIP elections. See QUALIFIED TERMINA-
Charitable remainder trusts for residential real Act of 1997, 193 BLE INTEREST PROPERTY (QTIP)
property. See CHARITABLE REMAIN- Jointly-owned property, §2040. See JOINTLY- Related persons to beneficiaries, §267(b) treat-
DER TRUSTS OWNED PROPERTY ment, 196
Crummey powers. See CRUMMEY TRUSTS Liability for. See FIDUCIARIES; LIABILI- Revocable trusts, election to treat as part of
EDixsecmlpatim erosr.g anSiezea tiDoIn SCpeLnAsiIoMn ERplSan s. See PEN- TBYI LITFYO R TAXES; TRANSFEREE LIA- Traensstfateer,s 1f9r5o m estate prior to paying estate tax
SION PLANS Payment of, surviving spouse’s elective share render executors personally liable (CA 2), 31
rights, 243
GST planning opportunities. See GENERA-
Private annuities, planning considerations, 119 EXEMPT ORGANIZATIONS
TTAIXO)N -SKIPPING TRANSFER TAX (GST et seq. Charitable remainder trusts. See CHARITA-
Holographic will creates deductible outright be- Rates BLE REMAINDER TRUSTS
quest, not non-deductible gift in trust —Pre-1977 gifts included in adjusted taxable Pension plans. See PENSION PLANS
Lif(e TAeMst)a,te s,3 0 term-for-years, annuities and re- g(iTftAsM )f,or 1us5e as reduction against estate tax PriTvaItOe NSfo undations. See PRIVATE FOUNDA-
—Retroactive increase in rate from 50 to 55
mainders, actuarial tables may not be used to percent held constitutional EXPATRIATION
value, Final Regs., 15 et seq. ——(CA 3), 229 GST tax, IRS refuses to rule on effect on effec-
Private annuities, 119 et seq. ——(DC EPa), 15 tive date protection for pre-9/25/85 trusts
—Income tax considerations, 178 et seq. Returns. See RETURNS (RP), 43
QPRTs. See QUALIFIED PERSONAL RESI-
Right of recovery of tax attributable to QTIP Guidance issued on transfers to foreign entities
DENCE TRUSTS (QPRTs) trust, §2207A, Taxpayer Relief Act of 1997 and 1996 legislation (Notice), 147
QTIP trusts. See QUALIFIED TERMINA-
changes, 196
BLE INTEREST PROPERTY (QTIP) Special use election. See SPECIAL USE RE- EXTENSION OF TIME FOR PAYMENT OF
Revocable trusts AL PROPERTY VALUATION ELEC- ESTATE TAX
—Election to treat as part of estate, 195 TION, §2032A Actively managed real estate enterprises treat-
—Elective share claims, use of trust to avoid, Special valuation rules under §2701-2704. See ed as active business for §6166 deferral pur-
238 ESTATE FREEZES poses (PLR), 32
“Sprinkling” trusts, utility as S corporation Transferee liability. See TRANSFEREE LIA- Final decision delayed in order to allow deduc-
shareholders after ESBTs created by SBJPA BILITY tion of accruing interest (US TC), 142
1996, 109 Unified estate and gift tax credit. See UNI- Incomplete estate tax return commences limita-
Surviving spouse’s elective share rights, 235 et FIED ESTATE AND GIFT TAX CREDIT, tions period for refund claim (CA 9), 31
seq. §2010 Interest reduced on deferred tax for small and
—Assets subject to election, 236 Valuation of assets. See generally VALUA- family-owned businesses, Taxpayer Relief
—Avoidance of elective share claims, 237 TION Act of 1997, 193
——Conflict of laws issues, 241
——Forum shop, 241 ESTATE TAX LIENS F
—— ——LTiIfrree voicnasbulrea nclei,f etaicmqeu istirtainosnfe rsof,, 224410 See LIENS FAMILY BUSINESS ENTITIES
——Post-marriage transfers, 240 Corporations. See CLOSELY-HELD CORPO-
——Pre-marital transfers, 240 ESTATES RATIONS
——Revocable trusts, 238 Abusive trust and estates situations, new Exclusion, §2033A enacted by Taxpayer Relief
——Tax-exempt assets, acquisition of, 241 §643(a)(7) gives IRS authority to issue regs. Act of 1997, 192
——Trust may be structured to encourage with force of statutory law, SBJPA 1996, 6 Partnerships. See PARTNERSHIPS
spouse’s acceptance, 243 Administrative expenses. See ADMINISTRA-
——Waiver by spouse or elective share rights, TIVE EXPENSES FARMING AND RANCHING
241 Distributable net income. See DISTRIBUTA- See SPECIAL USE REAL PROPERTY VAL-
—Deductibility of elective share interest, 245 BLE NET INCOME (DNI) UATION ELECTION, §2032A
—Disclaimer of rights, 246 Distributions. See DISTRIBUTIONS, ES-
—Gift tax implications, 246 TATES AND TRUSTS FEES AND COSTS
—Payment of estate taxes, 243 Executors. See EXECUTORS See ADMINISTRATIVE EXPENSES
—Principal statutory types, 235 Gross estate. See GROSS ESTATE
—Satisfying elective share, 237 Income tax. See INCOME TAX FEDUCIARIES
Non-resident aliens’ estates. See FOREIGN See also EXECUTORS; GUARDIANS;
Taxpayer Relief Act of 1997. See TAXPAYER
TRUSTS AND ESTATES TRUSTEES
RELIEF ACT OF 1997 Revocable trusts treatment as part of, 195 Definition of, 96
ESTATE TAX Separate share rule, Taxpayer Relief Act of Liability for estate and gift taxes, 96
Closely-held stock valuation. See VALUA- 1997, 196 —Collection of, 102
TION OF CLOSELY-HELD CORPORA- —Elements of, 97
TION STOCK ESTIMATED TAX FOR EXEMPT ORGANI- —Protections against, 103
ZATIONS
Codmemnut’nsi typ roppreorpteyr ty chcahlalreancgteedr izabtyio n IRoSf de(cUeS- UBIT, 198 FILING REQUIREMENTS
See generally RETURNS
TCM), I 11
D—eAddumcitniiosnts rative expenses. See ADMINIS- EXTCIEOSNSS RETIREMENT ACCUMULA- SFeIeN AENSCTIAATLE PPLLAANNNNIINNGG
TRATIVE EXPENSES Repeal of additional estate tax, Taxpayer Re-
—Charitable. See CHARITABLE CONTRI- lief Act of 1997, 197 501(cX¥3) ORGANIZATIONS
BUTIONS Excess benefit transactions excise tax, first-tier
—Marital. See MARITAL DEDUCTION EXCISE TAXES tax abatement authority, Taxpayer Relief
(ESTATE TAX) Excess benefit transactions excise tax, first-tier Act of 1997, 198
Excess retirement accumulations, repeal of ex- tax abatement authority, Taxpayer Relief
cise tax, Taxpayer Relief Act of 1997, 197 Act of 1997, 198 FOREIGN TRUSTS AND ESTATES
Extension of time for payment. See EXTEN- Qualified plan and IRA death benefits kept sep- Annual reports required, 264
SION OF TIME FOR PAYMENT OF ES- arate in rollover IRA not added to spouse’s Appreciated property transfers by U.S. persons
TATE TAX benefits for excess accumulations tax pur- to, gain recognition on, §684, 197
Family plan to purchase lottery tickets held to poses (PLR), 30 Definition, 257
be partnership for federal tax purposes (US Transfers to avoid U.S. income tax, repeal of Domestic vs. foreign determination, Taxpayer
TCM), 112 §1491, Taxpayer Relief Act of 1997, 197 Relief Act of 1997 transitional rule, 197; 258
GRO
ESTATES, GIFTS AND TRUSTS JOURNAL — 1997 ANNUAL INDEX 5
FOREIGN TRUSTS AND ESTATES—Contd. | Beneficiary’s release of power to request income Grantor’s payment of income taxes on trust
Excise tax on transfers to avoid U.S. income distributions has no gift tax implications may constitute additional gift to remainder-
tax, §1491, repeal by Taxpayer Relief Act of || (PLR), 267 men (PLR), 35
1997, 197; 262 Charitable contributions See CHARITABLE | Promissory note used to satisfy GRAT payment
Information reporting requirements, 263 CONTRIBUTIONS fatal to trust’s qualification (TAM), 184
Offshore asset protection trusts, 259 |Ed ucation IRAs, contributions to, Taxpayer |
Penalties for failure to file, 264 Relief Act of 1997, 194 | GRANTOR RETAINED INCOME TRUSTS
Prop. Regs., 257 et seq. Estate freezes. See ESTATE FREEZES (GRITs)
QDOTs. See QUALIFIED DOMESTIC Family plan to purchase lottery tickets held to | Reformation of defective GRIT results in taxa-
TRUSTS (QDOTs) be partnership for federal tax purposes (US ble gift, tax on disclaimed reversionary inter-
Reportable events, 263 TCM), 112 est not refundable when interest reinstated
Small Business Job Protection Act of 1996 Family reverse split-dollar life insurance plans, | (DC NInd), 38
—Accumulation trusts, interest rate for distri- | favorable treatment given (PLR), 35 | GRANTOR TRUSTS
butions from non-grantor foreign trusts in- Form over substance, taxes paid by spouse from
creased, 8 separate share within 3 years of death “gross- | Foreign trusts. See FOREIGN TRUSTS AND
—Grantor trust amendments, 260 up” decedent’s estate (TAM), 229 ESTATES
—Inbound foreign grantor trusts, 9 Liability for. See LIABILITY FOR TAXES | Funeral trust election, qualified, Taxpayer Re-
—Objective situs rules, 8 Marital deduction. See MARITAI DEDUC- | lief Act of 1997, 196
—Outbound transfers to foreign trusts, 9; guid- TION (GIFT TAX) | GRATs See GRANTOR RETAINED AN-
ance issued (Notice), 147; analysis of rule | Private annuities, planning considerations, 123 NUITY TRUSTS (GRATs)
changes, 260 Qualified state tuition plans, contributions to, | GRITs. See GRANTOR RETAINED IN-
—Reporting requirements expanded, 8; guid- | T:a xpayer Releitetefr Act of 1 1997, 194 COME TRUSTS (GRITs)
ance issued (Notice 97-34), 263 | Reformation of defective GRIT results in taxa- | Powers of appointment. See POWERS OF AP-
Special reporting rules, 264 ble gift, tax on disclaimed reversionary inter- | _ POINTMENT :
Taxpayer Relief Act of 1997 changes, 197; 257 | est not refundable when interest reinstated | QPRTs. See QUALIFIED PERSONAL RESI-
(DC NInd), 38 DENCE TRUSTS (QPRTs)
Truestt ss,e q.l egislative and regulatory update, 257 et | Revaluation not allowed after expiration of lim- | QSSTs. See QUALIFIED SUBCHAPTER S
seq itations period, Taxpayer Relief Act of 1997, | TRUSTS (QS; STs)
194 Reporting requirements, Final Regs., 9
U.S. beneficiaries, reporting by, 264
| Special valuation rules. See ESTATE | Revocable inter vivos trusts. See REVOCA-
FORFEITURE CLAUSES FREEZES BLE INTER VIVOS TRUSTS
Tax lien attachment not prevented by (CA 6), | Surviving spouse’s elective share rights, estate | Small Business Job Protection Act of 1996
14 planning implications of, 246 amendments, 260
| Unified estate and gift tax credit See UNI- | “Sprinkling” trusts, utility as S corporation
FOUNDATIONS, PRIVATE FIED ESTATE AND GIFT TAX CREDIT, | shareholders after ESBTs created by SBJPA
See PRIVATE FOUNDATIONS §2010 1996, 109
| Valuation. Se VALUATION | GRATs
FRAUDULENT TRANSFERS
Transferee liability, 99 | GIFTS | See GRANTOR RETAINED ANNUITY
See also GIFT TAX TRUSTS (GRATs)
FUNERAL TRUSTS Annual gift tax exclusion See ANNUAL
Pre-need elections, Taxpayer Relief Act of | GIFT TAX EXCLUSION GRITs
1997, 196 | Buy-sell agreements. See BUY-SELL AGREE- | See GRANTOR RETAINED INCOME
MENTS TRUSTS (GRITs)
G | Charitable gifts. See CHARITABLE CON- | Gross ESTATE
TRIBUTIONS
GENERATION-SKIPPING TRANSFER TAX | Charitable remainder trusts. See CHARITA- | Administrative expenses. See ADMINISTRA-
(GST TAX) BLE REMAINDER TRUSTS TIVE EXPENSES
Appointment power. See POWERS OF AP- | Checks, gift to non-charitable donee complete | Annual gift tax exclusion. See ANNUAIL
POINTMENT upon deposit by donee (RR), 73 GIFT TAX EXCLUSION
Certification of disability, extension of time to | Disclaimers. See DISCLAIMERS | Disclaimers. See DISCLAIMERS
Disfcillea igmrearnst ed anudn dejrud icRielala gls . c¢ o(nPsLtRr)u,c ti4o5n qquuaalillyi fy || GDiifstcso unwtist.h inS eet hrDeeI SyCeaOrUs NTofS death. See GIFTS DowTeErS Y andI NcTurEtResEy.S TSSe e DOWER AND CUR-
trust as QSST, but forfeit GST tax effective WITHIN 3 YEARS OF DECEDENT’S Family limited partnership interests included in
date protection (PLR), 13; 44 DEATH decedent's estate due to failure to observe
Expatriation of trust, IRS refuses to rule on Grantor’s payment of income taxes on grantor |, for.,m alities (US TCM), 184 eee
effect on effective date protection for pre- | trust may 3 constitute additional gift to re- | Family-owned business exclusion, §2033A en-
9/25/85 trusts (RP), 43 maindermen (PLR), 35 acted by Taxpayer Relief Act of 1997, 192
Final Regs., 39 et seq. | Installment obligations. See INSTALLMENT Farm property. See SPECIAL USE REAI
Inflation indexing of $1 million exemption, Tax- | OBLIGATIONS PROPERTY VALUATION ELECTION,
Injpuaryeedr Rdeelcieedfe ntAc t nootf 1t9r9a7n,s fe1r9o1 r of wrongful MarTiItaOlN d(edGuIcFtTi onT. AXS)e e MARITAL DEDUC- || Gif§ts2 03w2itAh in three years of death. See GIFTS
death proceeds, GST tax not applicable Personal representative of taxpayer estopped | WITHIN 3 YEARS OF DECEDENT'S
(PLR), 44 from changing selected form of gift based on | DEATH
Non-resident aliens, GST tax applies to direct substance of transaction (US TCM), 34 Life insurance. See LIFE INSURANCE
skips by despite lack of regs. at time of trans- Revocable trusts. See REVOCABLE INTER | Marital deduction. See MARITAL DEDUC-
fer (US TC), 46 VIVOS TRUSTS TION (ESTATE TAX)
Pre-deceased parent exception expanded, Tax- Special valuation rules. See ESTATE| Powers of appointment. See POWERS OF AP-
payer Relief Act of 1997, 194 FREEZES | QPRPTOs.I NTSeMeE QNUTA LIFIED PERSONAL RESI-
Private annuities, planning considerations, 123 Valuation. See VALUATION
Revocable trusts, election to treat as part of DENCE TRUSTS (QPRTs)
estate, 195 GIFTS WITHIN 3 YEARS OF DECEDENT’S QTIP. See QUALIFIED TERMINABLE IN-
Survivorship clause does not destroy $2 million DEATH TEREST PROPERTY (QTIP)
per grandchild exemption (CA 6), 42 Form over substance, taxes paid by spouse from Qualified conservation easement exclusion,
Waiver of estate’s right to recover estate taxes separate share within 3 years of death “gross- §2031(c) enacted by Taxpayer Relief Act of
on inclusion of QTIP in estate not construc- up” decedent’s estate (TAM), 229 1997, 194
tive addition to trust causing loss of effective Taxpayer Relief Act of 1997 clarification, 197 Retained life estates. See RETAINED LIFE
date protection (PLR), 43 ESTATES, §2036
GRANTOR RETAINED ANNUITY TRUSTS Revocable trusts. See REVOCABLE INTER
GIFT TAX (GRATs) VIVOS TRUSTS
Annual gift tax exclusion. See ANNUAL See also ESTATE FREEZES Stock in professional football team acquired by
GIFT TAX EXCLUSION Annuity payments made with funds borrowed children through exercise of purchase option
Appreciated property gifts. See APPRECIAT- from grantors disqualified GRATs under excluded from estate (US TCM), 227
ED PROPERTY §2702 (TAM), 47 Valuation. See VALUATION
GST
6 TAX MANAGEMENT
GST TAX INCOMPETENCY J
See GENERATION-SKIPPING TRANSFER See CHILDREN; DISABLED PERSONS
TAX (GST TAX) JOINTLY-OWNED PROPERTY
INDIVIDUAL RETIREMENT ACCOUNTS
See also COMMUNITY PROPERTY
GUARDIANS (IRAs)
Basis of pre-1977 tenancy by the entirety prop-
Ann(uTaAlM ),g ift2 66 tax exclusion, gifts by denied Edutcioantsi otno , ITRaAxsp,a ygeirf t Rtaexl ietfr eaAtcmte notf o1f9 9c7o,n tr1i9b4u - eWrDtyV a,a llDoCwe d Mad)1,0 0 23;p eVrac.e ntd ecissitoenp -uapf fir(mDeCd
Marital deduction qualification with QTIP (CA 6), 227
H trust corpus preserved for children (PLR), Disclaimers, Prop. Regs. detailed , 37
107 Federal lien attached prior to taxpayer’s death,
HANDICAPPED PERSONS Qualified plan and IRA death benefits kept sep- foreclosure after taxpayer’s death entitles
See DISABLED PERSONS arate in rollover IRA not added to spouse’s IRS to one-half proceeds of sale (CA 7), 142
benefits for excess accumulations tax pur- QPRTs. See QUALIFIED PERSONAL RESI-
HEALTH CARE poses (PLR), 30 DENCE TRUSTS (QPRTs)
Disabled persons. See DISABLED PERSONS
INFLATION INDEXING
JURISDICTION AND PROCEDURE
HEALTH INSURANCE PORTABILITY AND Annual gift tax exclusion, Taxpayer Relief Act
ACCOUNTABILITY ACT OF 1996 of 1997, 191 Executors held personally liable for estate taxes
Acc(eHlIePrAatAe)d death benefits paid on life insur- GSlTi ef tAaxc,t $o1f m1i9l9l7i,o n 19e1 xemption, Taxpayer Re- Fildiuneg otof trretaunrsnfse.r s Sefer omg eneesrtaatlel y (CRAE T2U),R N31S
IRS liens. See LIENS
ance policy, income tax rules relaxed, 4 Special use real property valuation election Limitations periods. See STATUTES OF LIM-
Outbound transfers to foreign trusis, guidance §2032A, Taxpayer Relief Act of 1997, 191 ITATION
issued (Notice), 147 INSTALLMENT OBLIGATIONS QDOTs, collection of tax, yoqpicements and
I GRAT payment, use of promissory note to sat- Revporcocaebdluer es,t rusFti nalc ouRnetgss . i, n 26d etermining net
isfy fatal to trust’s qualification (TAM), 184 worth of estate in qualifying for award of
INCIDENTS OF OWNERSHIP IRD. See INCOME IN RESPECT OF DECE-
attorneys’ fees (DC NOhio), 32
See LIFE INSURANCE DENT (IRD)
INCOME IN RESPECT OF DECEDFNT Promissory note with sound obligor and unusual L
payment schedule, value based on discounted
(IRD) value of anticipated cash flow (DC SMiss),
Alimony arrearages deemed IRD reportable on 21 LACK OF MARKETABILITY DISCOUNT
estate’s income tax return and taxable to ben- See DISCOUNTS
eficiaries under DNI conduit rules (CA 10), INSURANCE
109 See LIFE INSURANCE; SPLIT-DOLLAR LEASES AND LEASEHOLDS
Buy-sell agreement converts tax-free life insur- LIFE INSURANCE PLANS QPRTs. See QUALIFIED PERSONAL RESI-
ance proceeds into taxable IRD (US TCM), DENCE TRUSTS (QPRTs)
10 INTER VIVOS TRUSTS
Copyrighted works, rights to payments under See CHARITABLE REMAINDER TRUSTS; LEGISLATION, FEDERAL
licensing agreements accrued before death GRANTOR RETAINED ANNUITY Ed. Note: Includes only bills with assigned
ruled IRD, accrued after death deemed not TRUSTS (GRATs); REVOCABLE INTER numbers. For other bills, see specific subject
IRD (PLR), 11 VIVOS TRUSTS heads.
S corporations, basis reduced on shares ac-
quired from decedent to reflect IRD, SBJPA INTEREST HR
1996, 11 Accumulation trusts, interest rate for distribu-
2014, Revenue reconciliation bill, estate and
tions from non-grantor foreign trusts in-
INCOME TAX creased, SBJPA 1996, 8 gift tax changes detailed, introduced by
See also DISTRIBUTIONS, ESTATES AND Installment payment of estate tax, reduction of Archer (R-Texas), companion bill to S 949,
TRUSTS interest for small and family-owned business- 186
Accelerated death benefits paid on life insur- es, Taxpayer Relief Act of 1997, 193 S
ance policy, income tax rules relaxed, Pecuniary legacies, statutory interest on ruled
HIPAA 1996, 4 not necessary to estate administration and 949, Budget reconciliation bill, estate and gift
Administrative expenses, beneficiaries’ suit to therefore not deductible (TAM), 26 tax changes detailed, companion bill to HR
remove executors for mismanagement and Private annuities, valuation discount rates, 126 2014, 186
self-dealing, expenses not deductible from es- Tax Court delays entry of final decision in order
tate’s income under §212 (US TCM), 6 to allow deduction of accruing interest (US LIABILITY FOR TAXES
Basis adjustments. See BASIS TC), 142 Excess benefit transactions excise tax, §4958,
Beneficiaries. See BENEFICIARIES abatement authority for first-tier tax, Tax-
Charitable deduction. See CHARITABLE INTERNAL REVENUE SERVICE (IRS) payer Relief Act of 1997, 198
CONTRIBUTIONS Abusive trust and estates situations, new Executors personally liable for transfers from
Charitable remainder unitrusts. See CHARI- §643(a)(7) gives IRS authority to issue regs. estate prior to paying estate tax (CA 2), 31
TABLE REMAINDER TRUSTS, subheaa- with force of statutory law, SBJPA 1996, 6 Fiduciary liability. See FIDUCIARIES
ing: Unitrusts (CRUTs) Tax liens. See LIENS Transferee liability. See TRANSFEREE LIA-
DNI. See DISTRIBUTABLE NET INCOME BILITY
(DN1I) INTRA-FAMILY SALES
GRATs. See GRANTOR RETAINED AN- See ESTATE FREEZES; JOINTLY- LICENSING AGREEMENTS
NUITY TRUSTS (GRATSs) OWNED PROPERTY Copyrighted works, rights to payments accrued
IRD. See INCOME IN RESPECT OF DECE- before death ruled IRD, accrued after death
DENT (IRD) IRAs deemed not IRD (PLR), 11
IRS liens. See LIENS See INDIVIDUAL RETIREMENT AC-
Life insurance policy exchanges ofj oint-life for COUNTS (IRAs) LIENS
one life policy or multiple one-life policies not Disclaimed bequest, taxpayer had no property
eligible for tax-free treatment (PLR), 12 IRD right to which tax lien could attach (CA 5),
Life insurance trusts. See LIFE INSURANCE See INCOME IN RESPECT OF DECE- 268
TRUSTS DENT (IRD) Estate and gift taxes, special liens under §6324,
Pension and profit-sharing plans distributions. transferee liability, 98
See DISTRIBUTIONS, PENSION & IRREVOCABLE INTER VIVOS TRUSTS IRS’ failure to respond to executor’s request for
PROFIT-SHARING PLANS See CHARITABLE REMAINDER TRUSTS; prompt assessment raised bank’s mortgage
Private annuities, 178 et seq. REVOCABLE INTER VIVOS TRUSTS lien superior to IRS lien (CA 9 BAP), 31
QSSTs. See QUALIFIED SUBCHAPTER S Life insurance trusts. See LIFE INSURANCE Jointly-owned property, federal lien attached
TRUSTS (QSSTs) TRUSTS prior to taxpayer’s death, foreclosure after
Reporting requirements, consistent treatment, taxpayer’s death entitles IRS to one-half pro-
196 IRS ceeds of sale (CA 7), 142
Split-dollar life insurance plans. See SPLIT- See INTERNAL REVENUE SERVICE Spendthrift and forfeiture clauses in trust can-
DOLLAR LIFE INSURANCE PLANS (IRS) not stop IRS lien from attaching (CA 6), 14
ESTATES, GIFTS AND TRUSTS JOURNAL — 1997 ANNUAL INDEX
LIFE ESTATES M P
See QUALIFIED TERMINABLE INTER-
EST PROPERTY (QTIP); RETAINED MARITAL DEDUCTION (ESTATE TAX) PARTNERSHIPS
LIFE ESTATES, §2036 See also CHARITABLE REMAINDER See also ESTATE FREEZES
TRUSTS; ESTATE PLANNING; MARI- Family limited partnerships
LIFE INSURANCE TAL DEDUCTION (GIFT TAX) —Gross estate, interests included in due to fail-
See also ANNUITIES Administrative expenses paid from principal, ure to observe formalities (US TCM), 184
Accelerated death benefits paid on life insur- but not those paid from income, reduce de- —Partnership investment company rules, 200
ance policy, income tax rules relaxed, ductions (US SupCt; rev grant), 28; expenses et seq.
HIPAA 1996, 4 may be paid from income unless material lim- — —Contributing partner and partnership, tax
Buy-sell agreements itation on right to receive income (dec), 146; treatment of, 207
—cCorporate-owned insurance used to fund analysis of decision, 167 et seq —— Diversification rules, 204
purchases not included in shareholder’s es- Apportionment of tax to marital share reduces ——Gain recognition, 208
tate (PLRs), 24 marital deduction due to family integration ——Partnership investment company defined,
—Tax-free life insurance proceeds converted in- of will and revocable trust (DC Kan), 29 200
to taxable IRD (US TCM), 10 Disabled persons, deduction disallowed if ——Taxpayer Relief Act of 1997 changes, 209
General partner has no incidents of ownership spouse’s interest may be limited upon incom- Family plan to purchase lottery tickets held to
in policy held by and payable to partnership, petency (TAMs), 70 be partnership for federal tax purposes (US
Parrnttuorltna een rsifsnfehocrirl-p uf douresn dti antvcuiaonsl rupeevs ost.r aratuatelp eepdsl(, i PcLeaIRntRt)iiS,ot n i esw2io 4lf l h §o1ln0do 1in(lgao )n(gl2ei)fre || Holq(ouTegAsrMta,)p ,hi cn o3t0 w illn ocnr-eadteedsu cdteidbulcet iblgei fto utriing htt rubset- LifoTpefa C rMiotn)wnsne,ure rsrahsni1hcp1ie2,,p ngionet nepiornlaiclcl yu dpeahdre tlndie nr b eysh taaasnt ed no(p PaiyLnaRcb)ild,ee nt2st4o
insurance policies (RP), 4 | Premarital agreement, surviving spouse’s waiv- | Limited partnerships
Policy exchanges of joint-life for one life policy | er of dower and curtesy rights in exchange — Business trusts compared, 83 et seq
otra x-mfurlete iptlree atomnee-nlti fe (PpLoRl)i,ci es1 2 not eligible for df2o)ur,c ti2pb5rl oem iscela iomf algifaei nesstt atdee ceddoeenst ’nso t esctraetaet e (CdeA- || —Faitmedi lpya rtlniemristheidp s,pa rtthniesr shhiepasd.i ngS ee Family lim-
Split-dollar plans. See SPLIT-DOLLAR LIFE QDOTs. See QUALIFIED DOMESTIC || Minority and lack of marketability discounts
INSURANCE PLANS TRUSTS (QDOTs) allowed for general partnership interest de-
| spite right of withdrawal (US TCM), 19
Trusts. See LIFE INSURANCE TRUSTS QTIP. See QUALIFIED TERMINABLE IN- | Partner's basis in partnership interest adjusted
TEREST PROPERTY (QTIP) | to reflect share of charitable gifts by partner-
LIFE INSURANCE TRUSTS Qualified plan distributions in community prop- || _ ship (RR), 6
Alternative techniques to achieve grantor trust | erty states, Taxpayer Relief Act of 1997, 197 || Taxpayer Relief Act of 1997 changes for fami-
status, 218 | ly-owned businesses. See CLOSELY-HELD
— Beneficiaries, power to add, 219 MARITAL DEDUCTION (GIFT TAX) | CORPORATIONS
—Borrowing without adequate security, 219 } See also CHARITABLE REMAINDER Unincorporated entities holding life insurance
—Grantor’s spouse’s power imputed to grantor, | policies, IRS will no longer rule on partner-
TRUSTS; QUALIFIED TERMINABLE |
219 INTEREST PROPERTY (QTIP) | ship status vs. application of §101(a)(2)
—Income to grantor’s spouse, power to pay, transfer-for value rules (RP), 4
Buy-sell restrictions on gift of closely-held stock
219
—Sprinkling power in non-adverse trustee, 219 does not affect availability of deduction || PAYMENT OF ESTATE TAX
C—eSsusbasttiiotnu tiofo no f ogfr atnrtusotr atsrsuestts , st2a1t8u s and Crum- MA(RPILRT)A,L 39D EDUCTION TRUSTS |||| SeeF OERS TPAATYE MTEANXT; EOFX TEESNTSAITOEN TOAFX TIME
Chamreiyt abploew ersp,u rp2o1s7e , irrevocably payable for, PowSeeer PofO aWpEpRoiSn tmeOnFt AmParPitOalI NdTedMuEctNiTon trusts. |||| PLoEsCs UNdIedAuRcYti onB EQdiUsEaSllToSw ance exception for
219
QDOTSs. See QUALIFIED DOMESTIC | transaction between executor and benefi-
Crummey withdrawal rights, 216 TRUSTS (QDOTs) ciary, 196
Grantor trust rules, 212 QTIP. See QUALIFIED TERMINABLE IN-
Income tax consequences, 211 et seq. TEREST PROPERTY (QTIP) ENALTIES
Premium payments stimated tax penalty for UBIT, timing of first
—Adverse party control of, 213 installment, 198
MINORITY INTEREST DISCOUNT
——lNIonnd-iraedcvte rpsaey mepnartt y,o f,p o2w1e6r vested in, 214 See DISCOUNTS Forpeoirtgsn, 2t6ru4s ts, failure to file information re-
—Prohibition on use of income to pay, 216 MINORS | PENSION PLANS
Section 677(a)(3), 213 See CHILDREN | Non-TIAA-CREF plans, estate planning for,
| 159
LIMITATIONS PERIODS N | TIAA-CREF, estate planning for exempt orga-
See STATUTES OF LIMITATION nization fund, 151 et seq
ExtEeXnsTiEonN SoIf OtiNm e OfoFr pTaIyMmEen t FOofR estPatAe YMtaxE. NSTee NET GIFTS || ——AAcgcruemeumleantti onb etowpeteino ns,f un1d5 4 and non-profit em-
OF ESTATE TAX See GIFT TAX; GIFTS ployer, 154
—Annuities, types of, 154
LIMITED LIABILITY COMPANIES (LLCs) NON-PROFIT ORGANIZATIONS —Beneficiary, choice of, 157
Business trusts compared, 83 et seq. See CHARITABLE ORGANIZATIONS; —Calculation method, choice of, 158
CHARITABLE REMAINDER TRUSTS —Challenges facing fund and participants, 163
LIMITED PARTNERSHIPS Private foundations. See PRIVATE FOUNDA- ——Custodial] accounts, 164
See PARTNERSHIPS TIONS ——IRAs, 164
TIAA-CREF. See PENSION PLANS | ——Life insurance products, creative uses of,
LIVING TRUSTS 165
NON-RESIDENT ALIENS ——Section 401(k) plans, 163
See REVOCABLE INTER VIVOS TRUSTS
GST tax applies to direct skips by despite lack —Distribution options, 155 et seq
LLCs QDoOfT rse.gs . aSte et imeQ UofA LtrIaFnsIfeEr D (US DOTCM),E S4T6 IC —Eoxfe m1p99t7 , st1a9t8u s changed, Taxpayer Relief Act
See LIMITED LIABILITY COMPANIES TRUSTS (QDOTs) —Investment options, 155
(LLCs) —Non-U.S. citizen spouse, planning for, 163
LOANS O —Re1l6a6t ive income from various options, table,
Self-cancelling installment obligations. See IN- —Section 403(b), overview, 152
STALLMENT OBLIGATIONS OFFSHORE TRUSTS ——Distribution requirements, 153
See FOREIGN TRUSTS AND ESTATES — — Limitation on employee and employer con-
LOSSES tributions, 152
See CAPITAL GAINS AND LOSSES; OPTIONS ——Tax-deferred accumulation, 153
THEFT LOSSES See STOCK —Transfer options, 155
PER
8 TAX MANAGEMENT
PERSONAL REPRESENTATIVES PROMISSORY NOTES QUALIFIED TERMINABLE INTEREST
See EXECUTORS See INSTALLMENT OBLIGATIONS PROPERTY (QTIP)
See also MARITAL DEDUCTION (ESTATE
PERSONAL RESIDENCE TRUSTS PRTs TAX)
See QUALIFIED PERSONAL RESIDENCE See QUALIFIED PERSONAL RESIDENCE Buy-out rights contained in QTIP trust and will
TRUSTS (QPRTs) TRUSTS (QPRTs) rejected (TAM), 50
“Duty of consistency” prevents repudiation of
PLANNING PUBLICATIONS QTIP eligibility by personal representative of
See ESTATE PLANNING Ed. Note: For brief descriptions of current lit- | surviving spouse’s estate (TAM), 25
erature, see the Review of Estates, Gifts and Elections, effect on marital deduction, Temp.
POOLED INCOME FUNDS Trust Literature at the back of each issue. and Prop. Regs. issued, 111
Community trust may create pooled income Equitable apportionment of estate taxes, un-
Q
fund (RR), 6 clear will provision favors, QTIP property not
subject to (CA 6), 27
POWER OF ATTORNEY QDOTs Estate tax, recovery of attributable to QTIP
Annual gift tax exclusion, gifts under allowed See QUALIFIED DOMESTIC TRUSTS trust, §2207A, Taxpayer Relief Act of 1997
(TAM), 266 (QDOTs) changes, 196
Extension of time to make election allowed on
QPRTs
POWERS OF APPOINTMENT estate tax return but unavailable for inter
See QUALIFIED PERSONAL RESIDENCE
Court order construing power as not exercisable TRUSTS (QPRTs) vivos election (PLR), 143
in favor of decedent respected by IRS for Fractional-interest discounts of QTIP and out-
estate tax purposes (PLR), 24 right interests in same assets allowed despite
G—eEnfneforte actteiifovfnee-c stikdviaept pei unngtti elm tpr.da enastrfeheg rs . otfa ux pshpeoluds,e twriatnhsofuetr QSeSeS( QTQSsUS TAsL)I FIED SUBCHAPTER S TRUSTS GSTtian tcel tuastxia,o xne wsa oifovn e bro itnhoc fl uiesnsi togantr eo’sossf QreisTgtIhattP e toi( nC rAeesc toav5te)e,r n1eo8st -
exercise of power (CA 2), 43 constructive addition to trust causing loss of
—Final Regs., 42 QTIP effective date protection (PLR), 43
—Judicial construction of power of appoint- See QUALIFIED TERMINABLE INTER- Incompetency, marital deduction disallowed if
ment trust leads to loss of GST tax effective EST PROPERTY (QTIP) spouse’s interest may be limited (TAMs), 70
—Spdmeaatcxei iamlpr uomtp eocwtepireo,rn i oed(x PerLocRfis s)eR, u loef4 5c oAngtaiinnusets Ptreurspte tfuo-r QUMAELNITFSI ED CONSERVATION EASE- IRAt1r 0u7s tq uacloirfpicuast iopnr esfeorrv edm ariftoarl chdielddurcetni on( PLwRi)t,h
ities without jeopardizing effective date pro- Exclusion from gross estate for land subject to, Life estate in remainder interest not deductible
tection (PLR), 45 Taxpayer Relief Act of 1997, 194 QTIP interest (TAM), 30
Premarital agreement, surviving spouse’s waiv-
PRE-NEED FUNERAL TRUSTS QUALIFIED DISCLAIMERS er of in exchange for promise of life estate
See QUALIFIED FUNERAL TRUSTS See DISCLAIMERS does not create deductible claim against dece-
dent’s estate (CA 2), 25
PREFERRED STOCK QUALIFIED DOMESTIC TRUSTS (QDOTs) Remainder interest, purchase of by income ben-
Collection of estate tax, requirements and pro- eficiary, 139 et seq.
ValLuYat-iHonE LDof . SCeO RVPAOLRUAATTIIOONN SOTFO CCKL OSE- GScTe dutraexs,, FiFnianla l ReRgesg.s,. 4, 1 26 Revteaxr,s e FinQalT IPRse,gs .,g e4n1e ration-skipping transfer
PREMARITAL AGREEMENTS Non-trust arrangements treated as trusts, 197 Son allowed to purchase shares in family print-
Pre-RRA 1990 trusts, Taxpayer Relief Act of ing business from QTIP trust at book value,
Surviving spouse's waiver of in exchange for 1997 changes, 197 no marital deduction allowed (US FedCl),
promise of life estate does not create deduct- 230
i2b5l e claim against decedent’s estate (CA 2), QSeUeA LaIlFsoI EDD ISETMRPILBOUYTEIEON SB,E NEPFEINTS IPOLNA NS & Spednedstthrroiyf t marpirtoavli sidoend ucatppiloinc ab(lDeC toN OhQiToI)P, m1a0y8
PRIVATE ANNUITIES PPLRAONFSI T-SHARING PLANS; PENSION Stusbp ousien’cso mees tatnee edf or notrtu stb e to pqauiadl iftyo fsourr vQivTiInPg
See also ANNUITIES Contributions to, repeal of excess accumula- treatment (CA 11), 28
Actual investment return, 126 tions excise tax, Taxpayer Relief Act of 1997, Trust contingent on executor’s election ap-
Appraisals, 127 197 proved (US TC), 29
Estate tax considerations, 119 et seq.
Frequency of payments, 126 QUALIFIED FUNERAL TRUSTS R
Gift tax considerations, 123 Pre-need elections, Taxpayer Relief Act of
GST tax considerations, 123 1997, 196 RATES OF TAXES
Income tax considerations, 178 et seq. Estate tax. See ESTATE TAX
—Capital losses, 179 QUALIFIED PERSONAL RESIDENCE
—Depreciable property transfer, 179; 181 TRUSTS (QPRTs) REAL PROPERTY
—Single life payments calculated pursuant to Community property interest in residence ruled See also SPECIAL USE REAL PROPERTY
Rev. Rul 69-74, table, 182 permissible asset for funding (PLR), 49 VALUATION ELECTION, §2032A
—Transferee, 180 Cooperative association stock and related lease Actively managed real estate enterprises treat-
—Transferor, 178 et seq. qualify as personal residence for QPRT pur- ed as active business for §6166 deferral pur-
—TRweov. Rliuvle s, 69p-7a4y,m entatbsl e, ca1l8c3u lated pursuant to Houpossee s w(itPhL R)r,e nt5al0 unit qualifies as principal Chaproistesa bl(eP LR)r,e ma3i2n der trusts for residential
Interest rates, 126 residence for QPRT purposes (PLR), 49 property, planning considerations. See
Medical concerns, 127 Leaseback after reserved use term expires does CHARITABLE REMAINDER TRUSTS
Sample agreement, 128 not disqualify dual trusts holding equal ten- Liens against. See LIENS
Short life expectancy, 125 ancy-in-common interests in residence as
Structure of, 119 et seq. QPRTs (PLR), 49 RECIPROCAL TRUSTS
Valuation Prop. Regs. for PRTs and QPRTs, 48 Circular crossing of trustees amongst children
—Deviation from standard tables, 124 Sample document, 51 et seq. of taxpayer, doctrine not expanded to include
—Discounts, 126 (PLR), 269
—Joint and survivor annuity, 124 QUALIFIED STATE TUITION PLANS Substantially dissimilar trusts, doctrine not ap-
—Single life annuity, 123 Gift tax treatment of contributions to, Taxpay- plicable to (PLR), 23
—Term of years annuity, 123 er Relief Act of 1997, 194
—Use of actuarial tables and use of Rev. Rul. REFUNDS
80-80 Standard rejected (US TCM), 20 QUALIFIED SUBCHAPTER S TRUSTS Equitable recoupment doctrine cannot be used
(QSSTs) to increase refund of overpaid capital gains
PRIVATE FOUNDATIONS Disclaimers and judicial construction qualify tax (US TC), 31
Estimated tax penalty for UBIT, timing of first trust as QSST, but forfeit GST tax effective Incomplete estate tax return commences limita-
installment, 198 date protection (PLR), 13; 44 tions period for refund claim (CA 9), 31
Sprinkling S corporation trust, power to alter
PROCEDURE beneficial enjoyment creates eligible Subpt. REGULATIONS
See JURISDICTION AND PROCEDURE E trust under §674 (PLR), 14 See specific subject of regulation
STO
ESTATES, GIFTS AND TRUSTS JOURNAL — 1997 ANNUAL INDEX 9
RELATED TAXPAYERS Estate planning, use of trust to avoid elective SPECIAL USE REAL PROPERTY VALUA-
Loss deduction disallowance, executors and share claims, 238 TION ELECTION, §2032A
beneficiaries, 196 Life insurance trusts. See LIFE INSURANCE GST tax, Final Regs., 42
TRUSTS Qualified heirs who consented to election quasi-
REMAINDER INTERESTS QDOTs. See QUALIFIED DOMESTIC estopped from later denial of eligibility (CA
See also CHARITABLE REMAINDER TRUSTS (QDOTs) 10), 17
TRUSTS; DISCLAIMERS Taxpayer Relief Act of 1997 changes, 195 Recapture agreement essential requirement for
Actuarial tables may not be used to value, Final §2032A election, failure to provide cannot be
Regs., 15 et seq. | REVOCABLE TRANSFERS, §2038 corrected (CA 11), 22
QTIP trusts. See QUALIFIED TERMINA- | See REVOCABLE INTER VIVOS TRUSTS Taxpayer Relief Act of 1997
BLE INTEREST PROPERTY (QTIP) —Elective exclusion from gross estate for quali-
Sale of interest in closely-held stock, value of | ROLLOVERS fied family-owned businesses, new §2033A,
stock not included in estate (CA 3), 22; 71 Qualified plan and IRA death benefits kept sep- 192
arate in rollover IRA not added to spouse’s —Inflation indexing, 191
RENUNCIATIONS benefits for excess accumulations tax pur- —Modifications re cash lease to family mem-
See DISCLAIMERS poses (PLR), 30 bers, perfection of defective elections, 193
REPORTING REQUIREMENTS | RULE AGAINST PERPETUITIES SPECIAL VALUATION RULES, §2701-2704
Charitable contributions, Taxpayer Relief Act GST tax, exercise of special power of appoint- See generally ESTATE FREEZES
of 1997 modifications, 194 ment continues trust for maximum period of QPRTs. See QUALIFIED PERSONAL RESI-
Foreign trusts rules expanded, SBJPA 1996, 8; rule without jeopardizing effective date pro- | DENCE TRUSTS (QPRTs)
guidance issued (Notice 97-34), 263 tection (PLR), 45
Grantor trusts, Final Regs., 9 SPENDTHRIFT CLAUSES
Income tax reporting requirements, consistent S Marital deduction may be destroyed by apply-
treatment, Taxpayer Relief Act of 1997, 196 ing provision to QTIP trust (DC NOhio), 108
Information reporting requirements for foreign S CORPORATIONS Tax lien attachment not prevented by (CA 6),
trusts, 263 QSSTTRsU.S TSSe e (QQUSASTLsI)F IED SUBCHAPTER S 14
—Annual reports required, 264
—Penalties for failure to file, 264 Small Business Job Protection Act of 1996 SPLIT-DOLLAR LIFE INSURANCE PLANS
—Reportable events, 263 —Basis reduced on shares acquired from dece- See also LIFE INSURANCE
—Special rules, 264 dent to reflect IRD, 11
—U:SS. beneficiaries, reporting by, 264 —Charities as S corporation shareholders, 13 Cash surrender value in equity policy exceeding
amount returnable to employer, current taxa-
—Electing Small Business Trusts (ESBTs) cre-
RESIDENT ALIENS ated, 12 ble income to employee (TAM), 3
Private insurance, favorable gift and estate tax
See NON-RESIDENT ALIENS ——“Sprinkling” grantor trusts, use as S cor-
treatment given (PLR), 35
poration shareholders compared, 109
RESTRICTED SECURITIES —Post-death holding period rules for Subch. S Surhvoilvdoerrss hiipn Sp olciocryp oroan tiloinv es alolf ow“ecdo nt(rPolL”R ),s har1e4-5
Valuation, restrictions not considered in valuing trusts extended, 13
for decedent’s estate (US TC), 19 Survivorship split-dollar life insurance policy on SPLIT PURCHASE
RETAINED LIFE ESTATES, §2036 lives of ‘“‘control’’ shareholders allowed See JOINTLY-OWNED PROPERTY
(PLR), 145
See also ESTATE FREEZES
Actuarial tables may not be used to value, Final SALE-LEASEBACKS SPOUSES
Regs., 15 et seq QPRTs. See QUALIFIED PERSONAL RESI- Alimony arrearages deemed IRD reportable on
Estate tax, waiver of recovery right attributable DENCE TRUSTS (QPRTs) estate’s income tax return and taxable to ben-
to transferred property, §2207B, Taxpayer eficiaries under DNI conduit rules (CA 10),
Relief Act of 1997 changes, 196 SECTION 501(cX3) ORGANIZATIONS 109
Reciprocal trust doctrine not applicable to sub- Excess benefit transactions excise tax, first-tier Charitable remainder trusts. See CHARITA-
stantially dissimilar trusts (PLR), 23; 73 tax abatement authority, Taxpayer Relief BLE REMAINDER TRUSTS
Remainder interest in closely-held stock sold, Act of 1997, 198 Elective share estate planning. See ESTATE
value of stock not included in estate (CA 3), PLANNING
pfc ay SECTION 644 TAX Jointly-owned property. See COMMUNITY
Voting stock, retention of does not create right Repeal by Taxpayer Relief Act of 1997, 195 PROPERTY; JOINTLY-OWNED PROP-
to vote transferred non-voting stock, value not ERTY
included in gross estate (TAM), 23 SECURITIES Marital deduction. See MARITAL DEDUC-
See generally STOCK TION (ESTATE TAX); MARITAL DE-
RETIREMENT BENEFITS DUCTION (GIFT TAX)
See DISTRIBUTIONS, PENSION & PROF- SELF-CANCELLING INSTALLMENT OB- QDOTs. See QUALIFIED DOMESTIC
IT-SHARING PLANS LIGATIONS TRUSTS (QDOTs)
See INSTALLMENT OBLIGATIONS QTIP. See QUALIFIED TERMINABLE IN-
RETURNS TEREST PROPERTY (QTIP)
See also REPORTING REQUIREMENTS SIMPLE TRUSTS
Certification of disability, extension of time to Distributions. See DISTRIBUTIONS, ES- STATE AND LOCAL LAW
file granted under Regs. (PLR), 45 TATES AND TRUSTS Business trusts, statutory overview, 84 et seq.
Incomplete estate tax return commences limita-
tions period for refund claim (CA 9), 31 65 DAY RULE STATUTES OF LIMITATION
Timely mailed/timely filed rule for designated Section 663(b) election, extension to estates, Certification of disability, extension of time to
private delivery services (Notice), 267 Taxpayer Relief Act of 1997, 196 file granted under Regs. (PLR), 45
Fiduciary and transferee liability for estate and
REVERSIONARY INTERESTS SMALL BUSINESS JOB PROTECTION ACT gift taxes, 102
OF 1996
Reformation of defective GRIT results in taxa- Gift tax, revaluation not allowed after expira-
ble gift, tax on disclaimed reversionary inter- Abusive trust and estates situations, new tion of limitations period Taxpayer Relief
est not refundable when interest reinstated §643(a)(7) gives IRS authority to issue regs. Act of 1997, 194
(DC NInd), 38 with force of statutory law, 6 Payment of estate tax. See EXTENSION OF
Appreciated property given to private non-oper- TIME FOR PAYMENT OF ESTATE TAX
REVOCABLE INTER VIVOS TRUSTS ating foundations, charitable deduction limit-
See also DISTRIBUTIONS, ESTATES AND ed to donor’s basis, limited exception for pub- STOCK
TRUSTS licly-traded securities, 5 Charitable contributions of. See CHARITA-
Apportionment of tax to marital share reduces Foreign trusts and estates. See FOREIGN BLE CONTRIBUTIONS
marital deduction due to family integration TRUSTS AND ESTATES Closely held stock valuation. See VALUA-
of will and revocable trust (DC Kan), 29 Grantor trust amendments, 260 TION OF CLOSELY-HELD CORPORA-
Attorneys’ fees, trust counts in determining net S corporations. See S CORPORATIONS TION STOCK
worth of estate in qualifying for award of Special valuation rules, technical corrections Cooperative association stock and related lease
(DC NOhio), 32 —Section 2701, 46 qualify as personal residence for QPRT pur-
Estate, election to treat as part of, 195 —Section 2702, 47 poses (PLR), 50
SUB
10 TAX MANAGEMENT
STOCK—Contd. —Qualified state tuition plans, contributions to, —Legal liability, special liens, §6324, 98
Options 194 Protections against
—Buy-sell agreements for closely-held stock, re- —Revaluation not allowed after expiration of —Equitable, 106
strictions on gift of stock does not affect limitations period, 194 —Legal, 104
availability of marital deduction (PLR), 39 Gifts within 3 years of decedent’s death, 197
—Non-qualified options fall outside §§2701 GST tax, pre-deceased parent exception ex- TRANSFERS TO AVOID INCOME TAX,
and 2703 (PLR), 46 panded, 194 §1491
—Professional football team stock acquired by Income tax Repeal by Taxpayer Relief Act of 1997, 197
children through exercise of purchase option —Estate planning, provisions affecting, 199 262
excluded from estate (US TCM), 227 —Reporting consistency, 196 TRANSFERS WITHIN THREE YEARS OF
Restricted securities valuation, restrictions not Inflation indexing, 191 DEATH
considered in valuing for decedent’s estate Marital deduction property, waiver of estate tax
(US TC), 19 recovery rights from QTIP beneficiaries, See GIFTS WITHIN 3 YEARS OF DECE-
§2207A, 196 DENT’S DEATH
SUBSTANTIATION REQUIREMENTS Private foundations UBIT, payment of estimat- TREATIES
See generally CHARITABLE CONTRIBU- ed tax penalty, 198
See FOREIGN TRUSTS AND ESTATES
TIONS Provisions deleted in conference, 198
SUPREME COURT, USS. Qua§l2i0f3i1e(dc ) ceonnascetrevda,t io1n9 4 easement exclusion, TSeReU SalTsEo ESF IDUCIARIES; POWERS OF AP-
Marital and charitable estate tax deductions re- Qualified domestic trusts (QDOTs), 197 POINTMENT
duced by administrative expenses paid from Qualified pre-need funeral trust election, 196
principal, but not those paid from income Qualified retirement plans Circular crossing of trustees amongst children
(rev grant), 28; payment from income al- —Excess accumulations, additional estate tax of taxpayer, reciprocal trust doctrine not ex-
lowed unless material limitation on right to repealed, 197 panded to include (PLR), 269
receive (dec), 146; analysis of decision, 167 et —Excess distributions excise tax, §4980A re- Sprinkling S corporation trust, power to alter
seq. pealed, 197 beneficial enjoyment creates eligible Subpt.
—QTIP marital deduction, community proper- E trust under §674 (PLR), 14
SURVIVORSHIP RIGHTS
ty annuity qualification for, 197 TRUSTS
GST tax, condition does not destroy $2 million Related persons treatment of executors and
per grandchild exemption (CA 6), 42 beneficiaries, 196 See also specific types of trusts
Joint and survivor annuity, valuation of, 124 Retained life estates, waiver of estate tax recov- Abusive trust and estates situations, new
Split-dollar life insurance policy on lives of ery rights from beneficiaries, §2207B, 196 §643(a)(7) gives IRS authority to issue regs.
“control” shareholders in S corporation al- Revocable trusts, election to treat as part of with force of statutory law, SBJPA 1996, 6
lowed (PLR), 145 estate, 195 Administrative expenses. See ADMINISTRA-
TIVE EXPENSES
SWING-VOTE PREMIUMS Secotfi opnr op6e4r4t y,t axr eopne alg,a in1 95f rom sale or exchange Community trust may create pooled income
SeeC OVRPAOLRUAATTIIOONN SOTFO CKC LOSELY-HELD STeeapcahreartse’ srhaertei rermuelne,t efxutnedn siaosns octioa teisotnast,e s,e xe1m96p t Disfculnadi m(eRdR ),in te6r ests. See DISCLAIMERS
T status changed, 198 DisBtLriEb utNaEblTe IneNt COinMcEom e. (DSNeIe) DISTRIBUTA-
Throwback rules, repeal for domestic trusts,
195 Distributions. See DISTRIBUTIONS, ES-
TAX CREDITS TATES AND TRUSTS
Transfers to avoid income tax, repeal, 197; 262
Unified estate and gift tax credit. See UNI- UBTI, corporate sponsorship payments, 198 Fiduciaries. See TRUSTEES
FIED ESTATE AND GIFT TAX CREDIT, Unified credit, increase in amount, 191 GST tax. See GENERATION-SKIPPING
§2010 TRANSFER TAX (GST TAX)
TEACHERS’ RETIREMENT FUND AS- Income tax reporting requirements, consistent
TAX LIENS SOCIATIONS treatment, Taxpayer Relief Act of 1997, 196
See LIENS Exempt status changed, Taxpayer Relief Act of Life insurance trusts. See LIFE INSURANCE
TAX RATES 1997, 198 TRUSTS
Powers of appointment. See POWERS OF AP-
Estate tax. See ESTATE TAX TENANCY BY THE ENTIRETY POINTMENT
TAXABLE ESTATE See JOINTLY-OWNED PROPERTY QTITPE.R ESSeeT QPURAOLPIEFIRETDY T(EQTRIMP)I NABLE IN-
See ESTATE TAX; GROSS ESTATE TENANCY IN COMMON Section 644 tax, repeal by Taxpayer Relief Act
TAXPAYER RELIEF ACT OF 1997 QPRTs, leaseback after reserved use term ex- of 1997, 195
Charitable contributions pires does not disqualify dual trusts holding Separate share rule, 196
—Appreciated stock to private foundations, de- equal tenancy-in-common interests in resi- U
duction extended, 198 dence (PLR), 49
—Reporting requirement modifications, 194 TERMINABLE INTERESTS UNIFIED ESTATE AND GIFT TAX CREDIT,
Charitable remainder trusts, minimum 10 per- See QUALIFIED TERMINABLE INTER- §2010
cent interest, 198
EST PROPERTY (QTIP) Increase in excluded amount, Taxpayer Relief
Closely-owned businesses
Act of 1997, 191
—Elective exclusion from gross estate for quali- THEFT LOSSES
f1i9e2d family-owned businesses, new §2033A, Esteaxteecsu taornsd tarnuds ts,b enreefliactieadr iepse,r so1n9s6 treatment of SUeNeI FEIESDT ATTER ANTSAFXE;R GTEANXEERSA TION-SKiP-
—Family limited partnerships, partnership in- PING TRANSFER TAX (GST TAX);
vestment company rule changes, 209 THROWBACK RULES GIFT TAX
—lInterest reduced on deferred estate tax for Taxpayer Relief Act of 1997 changes, 195
small and family-owned businesses, 193 UNRELATED BUSINESS INCOME TAX
—Modifications re cash lease under §2032A to TIMELY MAILED/TIMELY FILED RULE (UBIT)
family members, perfection of defective elec- Private delivery services (Notice), 267 Estimated tax, timing of first installment pay-
tions, 193 ment, 198
Complex trusts and estates election, 65-day TRANSFER TAXES
rule, 196 See ESTATE TAX; GENERATION-SKIP- UNRELATED BUSINESS TAXABLE IN-
Excess accumulations excise tax repealed, 197 PING TRANSFER TAX (GST TAX); COME (UBTI)
Excess benefit transactions excise tax, first-tier GIFT TAX Corporate sponsorship income, exclusion from
tax abatement authority, 198 UBTI, Taxpayer Relief Act of 1997, 198
Excess distributions excise tax, §4980A repeal- TRANSFEREE LIABILITY
ed, 197 Alimony arrearages deemed IRD reportable on V
Foreign trusts and estates estate’s income tax return and taxable to ben-
—Appreciated property transfers by U.S. per- eficiaries under DNI conduit rules (CA 10), VALUATION
sons to, gain recognition upon, 197 109 See also ESTATE FREEZES; VALUATION
—Domestic versus, transitional rule for deter- Estate and gift taxes, 98 OF CLOSELY-HELD CORPORATION
mination, 197; 257 et seq. —Collection of, 102 STOCK
Gift tax —Equitable liabiiity, fraudulent transfers, 99 Buy-sell agreement between unrelated persons
—Education IRAs, contributions to, 194 —Extent of liability, 100 rejected as “device” (US TCM), 21