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Biden Administration Budget 2022: Employer Sponsored Death Benefits a Forgotten Planning Tool
Part One of this article, in last month's issue, introduced the concept of the taxation of capital income, under which the donor or deceased owner of an appreciated asset would realize a capital gain at the time of the transfer. The article discussed how an Employer-Sponsored Death Benefit plan could help remove the appreciated asset from one's estate and how the assignment of such a policy to an irrevocable life insurance trust (ILIT), or insurance limited partnership (ILP) will be recognized for federal transfer tax purposes.
Part Two provides more scenarios under which the asset may be assigned, based on IRS memoranda.
Written But Unannounced Rules
In the unpublished Technical Advice Memorandum (TAM) 97-6842, dated March 1, 1997, the IRS ruled that it would ignore the existence of an ILP for estate tax valuation purposes and would view the transactions as a single testamentary transfer. Under the circumstances described in the TAM, the IRS found that the sole purpose of the ILP was to reduce the estate taxes and, alternatively, that the IRC §2703(a)(2) applied. This TAM should be reviewed by all professionals who deal with ILPs, but professionals and taxpayers may consider the TAM to be a legitimate reaction to the abuse of an ILP to avoid estate taxes.
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Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
CoStar Wins Injunction for Breach-of-Contract Damages In CRE Database Access Lawsuit
Latham & Watkins helped the largest U.S. commercial real estate research company prevail in a breach-of-contract dispute in District of Columbia federal court.