GIFT TAXES
When splitting a gift between individuals and charitable organizations... It’s OK to let the charities get more if IRS revalues the gift to individuals, the Tax Court says. A mother set up an LLC and gave away $907,000 worth of units in it to trusts for her kids. That used up her remaining gift tax exemption. A portion of her gift went to charities. Under the gift’s terms, if IRS found that the LLC units were worth more than she thought, the trusts were required to give the charities any amount over $907,000. On audit, IRS said the LLC units had a higher value. But no additional gift tax was due because the extra amount went to the charities. The Service balked at the formula clause, but the Court OK’d it because the trusts still got the dollar amount the mother intended (Est. of Petter, TC Memo. 2009-280).
When splitting a gift between individuals and charitable organizations... It’s OK to let the charities get more if IRS revalues the gift to individuals, the Tax Court says. A mother set up an LLC and gave away $907,000 worth of units in it to trusts for her kids. That used up her remaining gift tax exemption. A portion of her gift went to charities. Under the gift’s terms, if IRS found that the LLC units were worth more than she thought, the trusts were required to give the charities any amount over $907,000. On audit, IRS said the LLC units had a higher value. But no additional gift tax was due because the extra amount went to the charities. The Service balked at the formula clause, but the Court OK’d it because the trusts still got the dollar amount the mother intended (Est. of Petter, TC Memo. 2009-280).
No comments:
Post a Comment