Law Commons^™

Defined Value Clauses And Fair Market Value, Wendy G. Gerzog

All Faculty Scholarship

In Hendrix the Tax Court considered the issues of whether defined value clauses were the result of arm’s-length transactions and whether they were void as against public policy. The underlying dispute was whether the taxpayers’ transfers of the John H. Hendrix Co. stock were valued at fair market value. With a decision favoring the taxpayers, the defined value clauses in both McCord and Hendrix impede the accurate valuation of taxable gifts to family members and of deductible charitable gifts.

Charitable Gifts By S Corporations And Their Shareholders: Two Worlds Of Law Collide, Christopher R. Hoyt

ACTEC Law Journal

This comprehensive article analyzes the rules that apply to, and the tax planning strategies for, a charitable gift of S corporation stock. It describes the interaction of the laws governing S corporations and tax-exempt organizations and describes the best ways to solve the challenges posed by each set of laws. The article also addresses additional challenges that can occur when specific types of tax-exempt organizations own S corporation stock, notably private foundations, donor advised funds, supporting organizations and ESOPs.

From the perspective of both the donor and the charity, three "bad things" happen when S corporation stock is contributed to …

Charitable Gifts Made By S Corporations: Opportunities And Challenges, Christopher R. Hoyt

ACTEC Law Journal

This article examines the tax opportunities and tax hazards when a subchapter S corporation makes a charitable gift. The article demonstrates that usually the shareholders of an S corporation and the charity are both better off when an S corporation makes a charitable gift compared to having a shareholder make a charitable gift of S corporation stock. Either way, the income tax benefit will be on the S corporation shareholder's personal income tax return. By having the S corporation make the gift, the parties avoid the "three bad things" that happen when a shareholder donates S corporation stock. The problems …

Trusts - Charitable Trusts - Ascertainment Of Dominant Intent In Application Of Cy Pres, Stuart S. Gunckel

Michigan Law Review

Testator made a residuary bequest to the city of Detroit "for a playfield for white children." The city agreed to accept this bequest if the racial restriction were removed under the doctrine of cy pres. In an action by the heirs to recover the bequest, the circuit court refused the application of the doctrine of cy pres although the city could not accept the gift unless it was permitted to establish a playfield for children of all races. On appeal, held, affirmed, by an evenly-divided court. Cy pres wiII not be applied in the absence of phrases in the …

Taxation-Federal Estate Tax-Charitable Deduction-Certainity Of Amount Of Gift In Remainder To Charity When Corpus May Be Invaded For Life Tenant, Frank L. Adamson S. Ed.

Michigan Law Review

Testator left his estate in trust for the life of his mother, giving her a life income of $750 per month. The trustees were authorized to use the rest of the income and the principal for her "pleasure, comfort and welfare" and were instructed to care and provide for her as she might desire. A deduction for a gift to charity of a portion of the remainder was disallowed by the commissioner. The executor sued to recover the tax paid, alleging that the annual income from the estate exceeded the mother's fixed share by $6000, that she had independent investments, …

Trusts-Charities-Erection Of Monument, J. Barrett

Michigan Law Review

Testatrix directed "that my executors . . . erect in the courthouse park at Madera, California, a granite tower . . . to contain a carillon . . . to be placed in the park at a reasonable cost . . . with an inscription . . . to be cut in a conspicuous place on the granite . . . to read as follows: 'Dedicated to the memory of all those . . . who strove to make Madera and Madera County all that it is. John L. Butin, M.D. Mary Ryerson Butin, M.D.'" Held, the devise constituted …