Taxation-Federal Estate and Gift Commons^™

Loopholes And Ambiguities Of Section 2036, James C. Ervin Jr.

Michigan Law Review

The possibility of divergent tax treatment of economically similar situations has made section 2036 of the Internal Revenue Code' one of the most abused of the federal estate tax provisions. Originally enacted to ensure inclusion within the gross estate of the value of all property ostensibly transferred by the decedent prior to his death and yet beneficially enjoyed by him during his lifetime, the section is being circumvented by an increasing number of tax avoidance patterns. Although some of the confusion can be traced to the erratic approach of the courts to cases involving section 2036, the primary interpretive difficulty …

Estate Tax-"Disallowance Of Double Deductions" In I.R.C. Section 642 (G) Applies Only To "Statutory Deductions"-Estate Of Bray, Michigan Law Review

Michigan Law Review

Petitioners, as executors for a substantial estate, had to sell a large amount of securities in order to pay administration expenses incurred by the estate. The estate received $2,250,000 from this sale, which was $50,000 in excess of the value of the stock at the time of decedent's death and thus as reported on the estate tax return. The brokerage commissions and taxes on the sale, which totaled $23,000, were deducted from the value of the gross estate as administration expenses pursuant to section 2053(a)(2) of the 1954 Internal Revenue Code. The same $23,000 was also subtracted from the $50,000 …

Estate Tax-The Failure Of I.R.C. Section 2039 To Reach Death Benefits Arising Out Of The Employment Relationship-Estate Of Fusz, Michigan Law Review

Michigan Law Review

Decedent's employment contract provided for a salary payable to him and monthly payments to his widow for life if he died during the term of the contract. No post-retirement benefits were payable to decedent under the contract or pursuant to any other agreement with the employer. After decedent's death during the term of the contract the payments to his widow commenced; their commuted value, however, was not included in the gross estate of decedent. The Commissioner of Internal Revenue, ruling that the payments to the widow constituted an annuity, the commuted value of which was includable in decendent's gross estate …

The Estate Tax Marital Deduction-Revenue Procedure 64-19

Indiana Law Journal

No abstract provided.

Federal Estate Taxation Of Community Property Life Insurance, Michigan Law Review

Michigan Law Review

Under section 2042 of the Internal Revenue Code of 1954, proceeds of insurance policies on the life of the decedent payable to beneficiaries other than the decedent's executor are included in the gross estate only if the decedent possessed at the time of his death "any of the incidents of ownership [in the insurance policies], exercisable either alone or in conjunction with any other person." To determine the extent of the decedent's "incidents of ownership," the Regulations provide for the application of state property law. The problems inherent in relying upon state law to govern federal estate taxation of the …

Identification Of Property Subject To The Federal Estate Tax, Charles L.B. Lowndes, Richard B. Stephens

Michigan Law Review

Although the federal estate tax is imposed on the "transfer" of property, the amount of the levy is a specified percentage of the taxable estate. Correct computation of the tax depends, therefore, upon accurate identification of the property included in the taxable estate. However, the determination and application of the rules governing identification are relatively uncharted areas.

Federal Estate Tax Burden Borne By A Dissenting Widow, Douglas A. Kahn

Articles

Renunciation of her deceased husband's will entitles a widow to a specified percentage of the husband's net estate (or a dower interest) in lieu of any benefits she would otherwise have received under the will. The size of the dissenting widow's share differs among the several states, but the normal range is from one third to one half of her husband's net estate. In some jurisdictions the widow's share is determined, in whole or in part, according to the portion to which she would be entitled if her husband had died intestate, but in these jurisdictions the widow's share generally …

Estate Tax--The Marital Deduction And Power Of Appointment, Edward` Garfield Atkins

West Virginia Law Review

No abstract provided.

Withholding Taxes On Wage Dividends For Pre-Bankruptcy Wages Assigned To Fourth Priority In Distribution Of Bankrupt's Estate-In Re Connecticut Motor Lines, Inc., Michigan Law Review

Michigan Law Review

Among claims against a bankrupt estate were those for unpaid wages and vacation pay earned within three months of the bankruptcy of the employer. The referee ordered distribution of the amount of the claims, assigning them second priority, but he refused to authorize deduction of income withholding tax and social security taxes from these payments as requested by the Government. The district court reversed, holding the trustee in bankruptcy liable for the taxes as a first priority administrative expense. On appeal, held, reversed. Taxes based on wage claims accruing prior to bankruptcy but paid during bankruptcy are section 64a(4) …

Widows' Allowances And Marital Deductions-The Date-Of-Death Rule, Michigan Law Review

Michigan Law Review

In every state there are statutes that provide for widows' allowances in an attempt to assure adequate support for widows during the time it takes to settle their husbands' estates. A common feature in most of these state support statutes is that the local probate judge is permitted to order an amount which the court finds to be reasonably necessary for the maintenance of the widow during the period of settlement to be set aside for her from the rest of the estate. The maximum amount permitted, the method of payment, the duration of the allowance, the extent to which …

Marital Deduction Formula Clauses In Estate Planning-Estate And Income Tax Considerations, Alan N. Polasky

Michigan Law Review

Once upon a time, and not so very long ago, a child was born, much to the delight of its lawyer-parents. As children will, it brought much joy and only occasional moments of dismay and concern during its early, formative years. But one day it entered the terrible teens, and at age sixteen it became, like many teen-agers, baffling, confusing, and frustrating, giving rise to frenzied attempts to cope with and control the complexities of its behavior. Its name? The Federal Estate Tax Marital Deduction.

The Joint And Survivor Account In Michigan-Progress Through Confusion, Richard V. Wellman

Michigan Law Review

Legal writers have been intrigued for years by the challenge of classifying and identifying the resulting incidents of the joint and survivor bank deposit when an attempt is made to use it as a mode of effectuating a donor depositor's intention to confer benefits on a donee co-depositor. Much in their discussions is useful to one who is concerned with the concept that has evolved in Michigan, where a 1909 statute states that some co-depositors are presumed to be joint tenants. Michigan judges and practitioners must determine, however, whether comment about national trends is applicable here, for in many respects …

The Irrevocable Inter Vivos Trust: Income And Estate Tax Consequences To The Donor And The Trustee, Mason Walsh Jr.

Duquesne Law Review

One of the most useful estate planning mechanisms for substantial estates is the irrevocable inter vivos trust. Such a trust might provide that all the income from the trust property be paid to the donor's wife (or child) for life with the income beneficiary having a power of appointment by will limited as to objects so as not to cause the trust property to be includible in her estate for federal estate tax purposes. In addition, the trustee might be given discretion to distribute corpus to or for the benefit of the income beneficiary either (a) in the trustee's absolute …

Income Tax Aspects Of Gifts And Leasebacks Of Business Property In Trust, William W. Oliver

Articles by Maurer Faculty

Rental deductions for a grantor who transfers property used in his business into a short term trust and then leases it back have been at issue in three recent cases, with the deduction being denied in two of the three cases. Some of the concepts used by the courts in these cases are of doubtful help in analyzing the problems, and there is a need for further clarification before tax consequences can be predicted with a reasonable degree of assurance. There is a possibility that the income will be taxed to the trust, even though a deduction is denied the …

Initial Impressions Of The Treasury Report On Foundations, Marcus Schoenfeld

Cleveland State Law Review

Very recently in the United States Treasury Department submitted its study of private foundations to Congress. This is the most recent development in an attempt to delineate the proper role of foundations and their donors in our society, and more particularly their proper tax treatment. Although it is much too soon to predict the effect of the Treasury Report, since Congress itself asked for the study, it is quite likely that some more restrictive legislation will result.

Fiduciary Administration-Power Of Court To Authorize Inter Vivos Distribution From Incompetent's Estate, Robert C. Bonges

Michigan Law Review

The guardians of an eighty-six-year-old incompetent multi-millionaire petitioned for authorization to give a portion of the ward's assets to his children and grandchildren. It was not suggested that the proposed beneficiaries were currently in need of funds, but rather the sole purpose of the inter vivas distribution was to minimize the impact of federal estate taxes on the ward's estate at his death. It was alleged and proved, however, that the proposed distribution would follow a plan which accorded substantially with the terms of the ward's will, and which the ward presumably would have followed himself, had he remained competent …

Estate Tax--Marital Deduction Formula Clause, Victor Alfred Barone

West Virginia Law Review

No abstract provided.

Abstracts Of Recent Cases, William Walter Smith

West Virginia Law Review

No abstract provided.

Voluntary Payments To Widows Of Corporate Executives: Gifts Or Income?, Paul A. Rothman

Michigan Law Review

The solicitude of hardhearted corporations for the widows of corporate executives has given rise to an abundance of cases involving the question whether payments to these widows constitute gifts or income. In the cases to be considered in this comment, payments are made by the corporation to the decedent's widow on a purely voluntary basis. In the typical situation, the board of directors adopts a resolution eulogizing the decedent and authorizing payments to his widow in recognition of his long and faithful service. In most cases, these payments are measured by the decedent's salary and continue for periods ranging from …

Bosland: Estate Tax Valuation In The Sale Of Merger Of Small Firms, Herman L. Trautman

Michigan Law Review

A Review of Estate Tax Valuation in the Sale of Merger of Small Firms. By Chelcie C. Bosland.

The Realization Requirement And Tax Avoidance, E. George Rudolph

Michigan Law Review

Consider, for a moment, the plight of G. E. Hall. During 1947 Hall incurred a gambling debt to the Las Vegas Club variously estimated at between 145,000 and 478,000 dollars. The debt came into the sole ownership of one Binion, a partner in the club, and was eventually settled by Hall transferring to Binion an undivided one-half interest in certain cattle located in Arizona and Montana. Thereafter, Hall and Binion engaged in the ranching business as partners. At this point the Internal Revenue Service came forward with a claim that Hall, in the course of this disastrous chain of events, …

Book Reviews, Joseph Trachtman, Philip A. Trautman, Arthur Larson, A. Kenneth Pye, Walter F. Murphy, Norman Redlich, Leroy Kahn, Edwin W. Patterson, Frederick M. Hart, Curtis J. Berger, Wallace R. Bennett, W. W. Patterson

Journal of Legal Education

No abstract provided.

Taxation--Transfer For Public Religious, And Charitable Uses, Fred Adkins

West Virginia Law Review

No abstract provided.

Federal Estate Tax - Marital Deduction

Duquesne Law Review

Effect of Revenue Procedure 64-19 on the use of the marital deduction under Pennsylvania law - Methods of preservation of the marital deduction.

Revenue Procedure 64-19, 1964 Int. Rev. Bul. 19.

Estate Tax Effects Of Premium Payments After Transfer Of Life Insurance, Michael A. Taylor

Cleveland State Law Review

Ordinarily when a donor lives for three years after the transfer, section 2035 (b) says the gift cannot be attacked as being made in contemplation of death. However, if the transferor of an insurance policy continues to pay the premiums after the transfer several questions are presented. Should each of these payments be regarded as a further gift, with the payments during the last three years considered as gifts in contemplation of death? If so, what amount would be included in the donor's estate because of the subsequent premium payments? Neither question has been answered by the courts. This paper …

Comparison Of Washington And Federal Gift Taxes, Richard H. Williams

Washington Law Review

Generally, federal gift tax consequences are uppermost in the Washington lawyer's mind when he deals with gift tax problems. Consequently, certain differences in the Washington gift tax law are inadvertently overlooked. Although the Washington Act was patterned after the federal act of 1932, several important areas of difference do exist between the two statutes. The purpose of this comment is to explain portions of the Washington gift tax statute, while comparing and contrasting it with the Internal Revenue Code of 1954. The dearth of cases construing the Washington gift tax statute presents a problem in areas where the statute is …

Abstracts Of Recent Cases, Boyd Lee Warner Ii

West Virginia Law Review

No abstract provided.

Federal Estate Tax-Determination Of Marital Deduction In Community Property State When Surviving Spouse Elects To Take Under Decedent's Will, Jon E. Denney

Michigan Law Review

Decedent, a Texas resident, provided that if his wife elected to take under his will she would receive one-third of the total community property and one-third of his separate estate. The remaining two-thirds of decedent's total estate was devised in trust for the benefit of his children. The widow elected to take under the will, thereby allowing her interest in the community property to pass as provided in the will. The executors claimed a marital deduction for the one-third separate property passing to the widow. Since she received less under the will than the value of her relinquished community property, …

Taxation-Federal Estate Tax-Tax Consequences Of A Gift In Contemplation Of Death By A Joint Tenant Or A Tenant By The Entirety, Fredric L. Smith S.Ed.

Michigan Law Review

This comment will examine the foregoing problem in light of several recent cases which have cast doubt on the presently conceived relationship between section 2035 and section 2040.

Future Interests-Powers Of Disposition-Some Practical Considerations In Using Powers Of Disposition For Testamentary Purpose, Lawrence Ray Bishop S.Ed.

Michigan Law Review

Testators, in an effort to retain control of their property from beyond the grave, have often developed schemes by which they attempt to alter the normal devolution of title to, and the utilization of, that property by their beneficiaries. One of the primary motives giving rise to such schemes is the desire to give the immediate object of a testator's bounty a great deal of flexibility and control in the use of the testamentary property, while reserving to the testator the possibility of controlling its further disposition upon the death of such person. The most theoretically suitable device by which …