Law Commons^™

Estate Planning For Cannabis Business Owners: An Introduction, Bridget J. Crawford, Jonathan G. Blattmachr

Elisabeth Haub School of Law Faculty Publications

As more states legalize cannabis sales, estate planners may increasingly be called upon to advise clients with interests in cannabis-related businesses. This essay seeks to assist estate planners in two ways. First, it aims to raise general awareness of cannabis business owners' unique concerns. Second, the essay provides an overview of some of the fundamental issues about which cannabis business owners are likely to seek estate planning advice: business formation matters, wealth transfers, the ability of trusts to own cannabis-related businesses, and gift, estate, and income tax considerations.

In most states that permit legal cannabis sales, there is limited (or …

Basis And Bargain Sales: Income Tax And Other Concerns, Bridget J. Crawford, Jonathan G. Blattmachr

Elisabeth Haub School of Law Faculty Publications

In this article, the authors explain the income tax consequences of the sale during lifetime and at death of property for less than fair market value. The authors focus in particular on the tax consequences of a bargain sale by a transferor who wishes to confer some financial benefit on a family member, but leave the rest of her estate to charity. Generally speaking, death-time bargain sales may be preferable to similar transactions during lifetime, if the assets have a low basis pre-death, because of the step up in income tax basis under section 1014. The authors also discuss in …

Irwin V. Gavit: Income Is (Sometimes) In The Eye Of The Beholder, William P. Lapiana

Articles & Chapters

No abstract provided.

Controversies In Tax Law: A Matter Of Perspective (Introduction), Anthony C. Infanti

Book Chapters

This volume presents a new approach to today’s tax controversies, reflecting that debates about taxation often turn on the differing worldviews of the debate participants. For instance, a central tension in the academic tax literature — which is filtering into everyday discussions of tax law — exists between “mainstream” and “critical” tax theorists. This tension results from a clash of perspectives: Is taxation primarily a matter of social science or social justice? Should tax policy debates be grounded in economics or in critical race, feminist, queer, and other outsider perspectives?

To capture and interrogate what often seems like a chasm …

Tax Recognition, Barry Cushman

Journal Articles

This article was prepared for the St. Louis University Law Journal’s “Teaching Trusts & Estates” issue. Many law students take a course in Trusts & Estates, but comparatively few enroll in a class devoted to the federal wealth transfer taxes. For most law students, the Trusts & Estates course provides the only opportunity for exposure to some of the basic features of the estate tax, the gift tax, the generation-skipping transfer tax, and some related features of the income tax. The coverage demands of the typical Trusts & Estates course do not allow for intensive discussion of these issues, but …

Kite: Irs Wins Qtip Battle But Loses Annuity War, Kerry A. Ryan

All Faculty Scholarship

In Kite, the Tax Court held that a 10-year deferred annuity constituted adequate and full consideration for a transfer of family partnership interests, even though the transferor died before receiving any payments. The court also held that the liquidation of a qualified terminable interest property trust and subsequent sale of its assets constituted a disposition of the qualifying income interest for life, resulting in a deemed transfer of the entire trust under section 2519. Ryan discusses those holdings and two more issues that were not raised in the Tax Court proceeding but are clearly implicated by the Kite facts.

Retirees Beware: Don't Worry About The British, 'Taxmageddon' Is Coming, Douglas A. Kahn, Lawrence W. Waggoner

Articles

"Taxmageddon" is coming. Unless Congress extends the current rates or reaches an agreement on tax reform, dividends will then be taxed as ordinary income at a marginal rate as high as 39.6 % and net capital gains will then be taxed at 20%. For high-income taxpayers, a 3.8% Medicare surtax will be added to the taxation of net capital gains, dividend income, interest, and other investment income, bringing the highest marginal rate to 43.4%.

It Is Logic Rather Than Whom You Trust: A Rejoinder To Prof. Cohen, Douglas A. Kahn

Articles

This article is the continuation of an exchange that has taken place between Prof. Stephen B. Cohen and me concerning the validity of criticisms leveled by Chief Justice John Roberts on an opinion by then-Judge Sonia Sotomayor writing for the Second Circuit in the case of William L. Rudkin Testamentary Trust v. Commissioner. While affirming the Second Circuit’s decision, Chief Justice Roberts, writing for a unanimous Supreme Court, criticized and rejected Justice Sotomayor’s construction of the relevant statutory provision. In an article in the August 3, 2009, issue of Tax Notes, Cohen defended Justice Sotomayor’s construction of the statute and …

The Times They Are Not A-Changin': Reforming The Charitable Split-Interest Rules (Again), Wendy G. Gerzog

All Faculty Scholarship

The article reviews the history of the tax treatment of charitable split interest gifts, explains the inequities that Congress both cured and generated in its 1969 reforms, and proposes solutions that are consistent with the goals of the 1969 legislation. The article discusses variations in the 1969 definition of a charitable split interest, which, because of the enacted statutory language, applies in instances where there is no abuse potential. The inequity produced by that definition penalizes the donor and flouts the rationale behind the 1969 legislation. By contrast, the creation of some required statutory forms of charitable split interests in …

Rudkin Testamentary Trust -- A Response To Prof. Cohen, Douglas A. Kahn

Articles

In the August 3 issue of Tax Notes, Prof. Stephen Cohen wrote an article about Justice Sonia Sotomayor’s opinions in three tax cases. Of those three cases, only the opinion she wrote in William L. Rudkin Testamentary Trust v. Commissioner, 467 F.3d 149 (2d Cir. 2006), Doc 2006- 21522, 2006 TNT 203-4, is worthy of comment. Although the Second Circuit’s decision in that case was affirmed by the Supreme Court under the name Knight v. Commissioner, the construction of the critical statutory language that Justice Sotomayor adopted was rejected and criticized by Chief Justice Roberts, writing for a unanimous court. …

Families For Tax Purposes: What About The Steps, Wendy G. Gerzog

All Faculty Scholarship

At least 4.4 million families in the U.S. are blended ones that include step-children and step-parents. For tax purposes, these steps receive preferential treatment for their status because they are on the one hand included as family members for many income tax benefit sections, but on the other hand excluded as family members for business entity attribution purposes and for gift and estate tax anti-abuse provisions. In the interests of fairness and uniformity, steps should be treated as family members for all tax purposes where steps have in fact voluntarily acted as their biological or adoptive counterparts, both when such …

From The Greedy To The Needy, Wendy G. Gerzog

All Faculty Scholarship

In some instances when the taxpayer makes a charitable donation, the loss of revenue to the government, and the corresponding gain to the taxpayer, far exceeds the benefit to the charity. Some of these losses may be generated by government sanctioned complex transactions and even government created devices. This article proposes a new way to examine "quid pro quo" charitable gifts that reflects the rationale for the charitable deduction.The article analyzes various charitable donations in terms of the dollars gained by the taxpayer, the dollars lost by the government, and the dollars received by the charity. After considering a sliding …

Reply Brief For Petitioner, Knight V. Commissioner Of Internal Revenue, No. 06-1286 (U.S. Nov. 2, 2007), Cornelia T. Pillard, Peter J. Rubin

U.S. Supreme Court Briefs

No abstract provided.

Brief For Petitioner, Knight V. Commissioner Of Internal Revenue, No. 06-1286 (U.S. Aug. 23, 2007), Cornelia T. Pillard, Peter J. Rubin

U.S. Supreme Court Briefs

No abstract provided.

Abandoning Principles: Qualified Tuition Programs And Wealth Transfer Taxation Doctrine, Wayne M. Gazur

Publications

In 1996 Congress gave its imprimatur to a modest qualified tuition program provision. Over the course of the next five years the provision was expanded, providing additional wealth transfer taxation and income taxation benefits. This essay proposes that unless limited, such benefits are inconsistent with established taxation principles and also have the potential to undermine the integrity of the wealth transfer tax structure and the progressive nature of the income tax.

Marriage And The Income Tax Yesterday, Today, And Tomorrow: A Primer And Legislative Scorecard, Ann F. Thomas

Articles & Chapters

No abstract provided.

Tax Consequences Of Assigning Life Insurance - Time For Another Look, Douglas A. Kahn, Lawrence W. Waggoner

Articles

The Taxpayer Relief Act of 1997 furnishes the courts and the Internal Revenue Service an opportunity to close certain loopholes in the federal tax consequences of assigning life insurance. About twenty years ago, we published an article arguing that the tax consequences of assigning life insurance affords taxpayers unwarranted opportunities for tax avoidance. Since then, developments in the case law and Internal Revenue Service rulings have broadened the loopholes. In the update of our article, we show how the new tax law supports our original position.

The Funding Of Children's Educational Costs, Douglas A. Kahn

Articles

A plan for reduction of educational costs should take federal transfer taxes into account. The method chosen for reducing income tax liability usually will involve making gifts. To the extent that it is convenient to do so, the transfer tax consequences of making such gifts should be minimized. This article will examine the estate and gift tax consequences of the income tax reduction arrangements described herein and will consider means of structuring the transactions so as to minimize those consequences.

Disparate Tax Treatment Of Different Types Of Business Organizations: Where Should We Go From Here?, Douglas A. Kahn

Articles

If several persons wish to join together in a common enterprise in order to pool their capital or labor or some of each, they may choose among a variety of available organizational structures that will serve that purpose. The most common entity forms are partnerships (including joint ventures), corporations, and trusts. While, in its typical structure, each of those entity forms has its own distinct characteristics, the structure of such organizations often is modified by agreement so as to adopt attributes of another type of entity. Because of this, the substantive distinction between entity types is blurred.

Federal Taxation Of The Assignment Of Life Insurance, Douglas A. Kahn, Lawrence W. Waggoner

Articles

The most litigated estate tax issue concerning life insurance is whether the proceeds should be included in the insured's gross estate. This question usually is governed by section 2042 of the Internal Revenue Code of 1954, the estate tax provision directed specifically at life insurance. While the Tax Reform Act of 1976 wrought enormous changes in many areas of estate taxation, Congress did not change section 2042. Thus the several unresolved questions concerning the interpretation of that section remain unsettled. But the question of the includability of life insurance proceeds in the gross estate of the insured is not always …

A Guide To The Estate And Gift Tax Amendments Of 1970, Douglas A. Kahn

Articles

The Excise, Estate, and Gift Tax Adjustment Act of 1970 [Pub. L. No. 91-614 (Dec. 31, 1970) made a number of amendments to the federal estate and gift tax laws. The estate tax laws were amended to shorten the period of time for filing estate tax returns and for the alternate valuation date and for several related items. In addition, for income tax purposes, the holding period of property that was included in a decedent's gross estate and that was acquired from the decedent was altered; and fiduciaries were granted additional means of obtaining a discharge of their personal liability …

Mandatory Buy-Out Agreements For Stock Of Closely Held Corporations, Douglas A. Kahn

Articles

A buy-out of a shareholder's stock is a sale of his stock holdings in a specific corporation pursuatnt to a pre-existing contract. In recent years such arrangements have, deservedly, become an increasingly popular planning device for shareholders in closely held corporations; they make it possible to limit the class of potential shareholders, provide liquidity for the estate of a deceased shareholder, and establish a value for stock which has no active market. There are two popular categories of buy-out plans. If the prospective purchaser of a decedent's shares is the corporation that issued them, the plan is called an "entity …