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What is a Disclaimer?
A postmortem technique to rectify present planning mistakes and legal drafting errors which allows a 9 month window of opportunity to redistribute a decedent's assets and influence tax consequences.
What Sec. Deals with disclaimers?
2518
What are disclaimers usually used for?
For the purpose of directing property to a specific recipient.
What is the DSUE(A)
Deceased Spousal Unused Exclusion (Amount) - after 2010, the surviving spouse of a Decedent dying can utilize any of the deceased spouse's ununused basic credit/exclusion amount. This is under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (TRA 2010) and the American Taxpayer Relief Act of 2012 (ATRA 2012)
What is the difference between a release and a disclaimer?
A release involves the relinquishment of a power or interest in property that has previously been accepted.
A disclaimer requires that the disclaimer must not expressly have accepted the disclaimed property or any benefits of the property interest
If someone is going to disclaim property, how much time do they have to do it in?
Within 9 months.
What does Sec 2032A address
The personal representative can elect that a farm and certain closely held business property included in a decedent's gross Estate be valued for estate tax purposes at its current or special use value vs its highest and best use value.
What does Sec 6166 address
Personal Rep may elect to defer the payment of estate tax attributable to the inclusion of a closely held business in a decedent's estate. If the business is >= 35% of adjusted gross estate and estate qualifies, estate taxes may be payable over 14 years and 9 months. This allows the business to remain open and continue vs being sold to pay the taxes.
What does IRC Sec 303 address
An estate that holds stock can redeem a portion to pay funeral and admin expenses and death taxes without the redemption being treated as a dividend. This helps the estate reduce its tax liability by reducing its taxable income.
What is the Alternate Valuation Date election
Personal Representative can value assets as of DoD or 6 months later, whichever is lower, to avoid paying higher estate taxes.
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