Articles Tagged with bohemia estate planning lawyer

GIFT TAX LIABILITY

Gift tax liability and estate planning sometimes intersect.  The tax Court case of Steinberg v. Commissioner, 141 T.C. No. 8 (Sept. 30, 2013) deals with an interesting issue, if tax law can ever be interesting, where gift tax liability and estate tax liability intersect.  It is important to note that the opinion deals with gift tax liability and how to measure gift tax liability, it nonetheless deals with some important estate tax implications.  In 2007, Ms. Jean Steinberg gifted approximately $71,000,000 in cash and securities to her four daughters.  In exchange, the daughters agreed to pay the gift taxes as well as the estate tax on the transfer should Ms. Steinberg pass away within three years of the gift transfer.  An appraiser valued that the daughters assumed approximately $6,000,000 in tax liability for the estate taxes alone.  When Ms. Steinberg filed her tax return, the IRS disagreed with the $6,000,000 write off, as the daughter’s assumption of estate tax liability did not increase the value of the estate.  The Internal Revenue Service (IRS) claimed that Ms. Steinberg owed an additional approximately $2,000,000 in taxes and mailed her a notice of deficiency.  

ESTATE TAX LIABILITY