Tax Law Commons^™

The Matthew Effect And Federal Taxation, Martin J. Mcmahon Jr.

Martin J. McMahon

The “Matthew Effect” is a synonym for the well-known colloquialism, “the rich get richer and the poor get poorer.” This Article is about the Matthew Effect in the distribution of incomes in the United States and the failure of the federal tax system to address the problem. There has been a strong Matthew Effect in incomes in the United States over the past few decades, with an increasing concentration of income and wealth in the top one percent. Nevertheless, there has been a continuing trend of enacting disproportionately large tax cuts for those at the top of the income pyramid. …

Family Limited Partnerships: Discounts, Options, And Disappearing Value, Karen C. Burke, Grayson M.P. Mccouch

Karen Burke

Family partnerships have been become increasingly popular as a means of avoiding estate and gift taxes. As other estate freezing techniques have been closed off by statutory anti-abuse rules, estate planners have increasingly resorted to partnerships as a vehicle for transferring assets within a family at deeply discounted values. Discounts ranging from one-third to over one-half of the value of the underlying assets are routinely claimed, and often allowed, based on lack of marketability and lack of control, even where these disabilities have no lasting or ascertainable economic effect. Nevertheless, the use of family partnerships to suppress value for transfer …

Family Limited Partnerships: Discounts, Options, And Disappearing Value, Karen C. Burke, Grayson M.P. Mccouch

Grayson McCouch

Family partnerships have been become increasingly popular as a means of avoiding estate and gift taxes. As other estate freezing techniques have been closed off by statutory anti-abuse rules, estate planners have increasingly resorted to partnerships as a vehicle for transferring assets within a family at deeply discounted values. Discounts ranging from one-third to over one-half of the value of the underlying assets are routinely claimed, and often allowed, based on lack of marketability and lack of control, even where these disabilities have no lasting or ascertainable economic effect. Nevertheless, the use of family partnerships to suppress value for transfer …

The New World Of Estate Planning After The 2012 Tax Act 15 (Abbreviated Outline) An Estate Planner's Perspective On Recent Tax Developments: The Year In Review, John B. O'Grady, Howard M. Zaritsky

William & Mary Annual Tax Conference

No abstract provided.

Strange Bedfellows: The Federal Constitution, Out-Of-State Nongrantor Accumulation Trusts, And The Complete Avoidance Of State Income Taxation, Jeffrey Schoenblum

Vanderbilt Law Review

With the maximum rate of federal income tax at 39.6 percent, the Medicare surtax on investment income of 3.8 percent, and some state income tax rates exceeding 9 percent, taxpayers in the highest brackets have been seeking to develop strategies to lessen the tax burden. One strategy that has been receiving increased attention is the use of a highly specialized trust known as the NING, a Nevada incomplete gift nongrantor trust, which eliminates state income taxation of investment income altogether without generating additional federal income or transfer taxes. A major obstacle standing in the way of accomplishing this objective, however, …

Alms To The Rich: The Facade Easement Deduction, Wendy G. Gerzog

All Faculty Scholarship

This article presents the case for repeal of the façade easement deduction. Proponents of this benefit argue that the deduction encourages historic preservation by reimbursing property owners for relinquishing their right to alter the façade of their property in a way inconsistent with that conservation goal; however, this article shows that there are many reasons to urge its repeal: the revenue loss, the small number of beneficiaries, the financial demographics of that group of beneficiaries; the dubious industries that are supported by the deduction; and the continual marked overvaluation and abuse despite Congressional, court, and administrative review and expense.

After …

The Intersection Of Tax And Bankruptcy: The Mccoy Rule, John Ferguson

John Ferguson

No abstract provided.

Elaine Hightower Gagliardi On Flipping The Lens Of Estate Planning: An Examination Of The Effectiveness Of Lifetime Transfers To Achieve Federal And State Tax Savings, Elaine H. Gagliardi

Faculty Journal Articles & Other Writings

Estate planners are recalibrating their planning focus in response to recent tax modifications at the federal and state levels. The need to refocus planning emanates from changes wrought by recent federal tax acts, beginning in 20011 and ending in 20132 with enactment of “permanent” provisions which increase the basic exclusion amount for federal estate and gift tax and generation skipping transfer tax exemption to an inflation adjusted $5,340,000 as of 2014,3 institute the portability election for federal estate tax purposes,4 alter the transfer tax rate to essentially a flat 40 percent,5 and eliminate the state death tax credit in favor …

Front Matter

ACTEC Law Journal

No abstract provided.

Saving For Education: Creating Educational Dynasty Trusts Using 529 Plans, Susan T. Bart

ACTEC Law Journal

No abstract provided.

Virtual Currency Estate Planning, Bit By Bit, Abigail J. Farmer, Cory Elizabeth Tyszka

ACTEC Law Journal

This article addresses the issues that virtual currencies, specifically bitcoins, pose for the mindful estate planner. First, it explains what bitcoins are, where they come from, and what their legal status is. Next, it identifies special problems that bitcoins pose in estate planning. Finally, it concludes by offering solutions to these problems, including recommended transfer mechanisms and gifting strategies.

Predispute Arbitration Agreements Between Trustees And Financial Services Institutions: Are Beneficiaries Bound?, Mary F. Radford

ACTEC Law Journal

No abstract provided.

Means To An End: Electively Forcing Vesting To Suit Tax Rules Against Perpetuities, James P. Spica

ACTEC Law Journal

Editor's synopsis: Exercising special powers of appointment over tax advantages trusts in a jurisdiction that has enacted perpetuities reform can be hazardous in light of the so-called "Delaware tax trap" and the "constructive additions" and trust-modification rules of the Treasury's GST-tax effective date regulations. Compliance with these federal tax rules against perpetuities may or may not be guaranteed by the applicable reform legislation. This Article examines a particular situation in which self-help is required for compliance, offers a set of forced-vested provisions to fit the bill, and indicates how those provisions can be adatpted for use in other situations in …

Beyond Donor Intent: Leveraging Cy Pres To Remedy Unintended Burdens Caused By Charitable Gifts, Katie Magallanes

ACTEC Law Journal

No abstract provided.

The Tax Code's Crowdfunding Dilemma: The Temptation Of Kickstarter Creators To Use The Gift Exclusion Under Section 102(A), Eric Dietz

Hamline Law Review

abstract

The Contemporary Tax Journal’S Interview Of Pam Olson, Stuti Seth

The Contemporary Tax Journal

No abstract provided.

What's Wrong With A Federal Inheritance Tax?, Wendy G. Gerzog

All Faculty Scholarship

Scholars have proposed a federal inheritance tax as an alternative to the current federal transfer tax, but there are serious flaws with that idea. In existing inheritance tax systems, those problems include: (1) different tax rates and exemptions based on the decedent’s relationship to the beneficiary; (2) the lack of a tax on lifetime gratuitous transfers, including gifts with retained interests or control; and (3) the persistence of most current valuation distortion abuses. In any inheritance tax model, moreover, there would be significantly decreased compliance rates and increased administrative costs because by focusing on the transferees instead of the transferor, …

Front Matter

ACTEC Law Journal

No abstract provided.

The Terms Of The Trust: Extrinsic Evidence Of Settlor Intent, Fred Franke, Anna Katherine Moody

ACTEC Law Journal

Each edition of the Restatement of Trusts defined the phrase "the terms of the trust" exactly the same. It means the manifestation of the settlor's intent expressed in a manner that admits of its proof in judicial proceedings. This definition weds the language of the instrument to the evidentiary rules governing Trust contests. This article explores the extent to which extrinsic evidence of settlor intent is admissable and consequently a consideration for those puzzling out the meaning of a trust.

The Physician Orders For Life-Sustaining Treatment (Polst) Coming Soon To A Health Care Community Near You, Robert B. Wolf, Marilyn J. Maag, Keith Bradoc Gallant

ACTEC Law Journal

No abstract provided.

The Persistent Preference For Inception Assets, Trent S. Kiziah, J. Clay Singleton, Stewart A. Marshall Iii

ACTEC Law Journal

Often trusts contain assets which were formerly owned by the grantor. This article addresses whether trustees should give any preference to these assets in managing the trust portfolio. Particular attention is given to how the law has treated these assets over time and the current state of the law. For those trustees who wish to retain inception assets, the article contains practical guidelines to assist trustees.

Book Review: Robespierre Meets The Foreign Tax Credit: Reflections On Piketty's "Capital In The Twenty-First Century" And The Contemporary Tax Policy Debate, Michael A. Livingston

ACTEC Law Journal

No abstract provided.

Van Alen: A Reasonable Consistency, Wendy G. Gerzog

All Faculty Scholarship

In Van Alen, the Tax Court held that the duty of consistency required that two of the decedent’s children use the section 2032A basis valuation figures to determine gain on the sale of their interest in the decedent’s ranch, which was left to them in trust. The siblings had argued that their stepmother erroneously completed their father’s estate tax return.

A Critical Research Agenda For Wills, Trusts And Estates, Bridget J. Crawford, Anthony C. Infanti

Articles

The law of wills, trusts, and estates could benefit from consideration of its development and impact on people of color; women of all colors; lesbian, gay, bisexual, and transgendered individuals; low-income and poor individuals; the disabled; and nontraditional families. One can measure the law’s commitment to justice and equality by understanding the impact on these historically disempowered groups of the laws of intestacy, spousal rights, child protection, will formalities, will contests, and will construction; the creation, operation and construction of trusts; fiduciary administration; creditors’ rights; asset protection; nonprobate transfers; planning for incapacity and death; and wealth transfer taxation. This essay …

The Geography Of Marriage, William P. Lapiana

Articles & Chapters

No abstract provided.