iconoclast, demystifyier, thought leader
The Jack Straw Fortnightly newsletter analyzes current developments in the law -- both tax and nontax -- concerning the transfer of private wealth in this country -- with something of an emphasis on issues affecting charitable gift planning, and with something of a contrarian take on what the eponymous "Jack" would call the "trade" or "craft" of lawyering.
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volume 8, number 2 - 19 May 2025
| volume_eight_number_two.pdf |
- In PLR 202504002, IRS denies an executor's request for an extension to "augment" a timely QTIP election.
- In CCA 202504014, a branch chief maps out the private benefit, indirect self-dealing, etc. arising from a private foundation having made unsecured loans to entities in which foundation managers held interests.
- Which indirectly leads Jack to uncover eleven, count 'em, pending Tax Court petitions involving the "charitable LLC" transaction we wrote up in two comma fourteen of the Straw. More to come.
- IRS throws in the towel on identifying "reportable transactions" by notice, going straight to formal regulatory projects.
- And an order on a motion in limine in the Tax Court throws shade on the privilege attaching to communications under a Kovel engagement.
| nastanski_order_032025.pdf |
| nastanski_order_022025.pdf |
volume 8, number 1 - 18 February 2025
| volume_eight_number_one.pdf |
Starting season eight with a long form piece discussing a single, recent decision of a state appellate court in Missouri. Jack giving his typically contrarian view. Meanwhile a couple dozen other items accumulating in the queue for eight comma two, which we hope to get to shortly.
volume 7, number 2 - 31 December 2024
| volume_seven_number_two.pdf |
Closing the year and volume seven with a writeup of the decisions in Moore and Connelly, the denial of cert in Quinn, and the ongoing saga in Jarrett. Jack says he has good intentions to get back on track in 2025, but we have heard that before.
| rogovy_petition_17513-24.pdf |
| connelly_slide_deck_excerpt_facts.pdf |
| connelly_slide_deck_excerpt_caselaw.pdf |
volume 7, number 1 - 05 November 2024
| volume_seven_number_one.pdf |
More than a year since our last previous issue. Wanted to get this out before the election results started coming in.
A somewhat lengthy discussion of Rev. Rul. 2023-02, with a link to a somewhat lengthier discussion, published elsewhere. A brief discussion of 303 Creative, with again a link to an article published elsewhere. An almost cursory discussion of the proposed DAF regs, with a link to a webinar and a slide deck.
A somewhat lengthy discussion of Rev. Rul. 2023-02, with a link to a somewhat lengthier discussion, published elsewhere. A brief discussion of 303 Creative, with again a link to an article published elsewhere. An almost cursory discussion of the proposed DAF regs, with a link to a webinar and a slide deck.
volume 6, number 2 - forthcoming (not)
| rr-77-193.pdf |
| plr_9515039.pdf |
| plr_9535026.pdf |
volume 6, number 1 - 15 May 2023
| volume_six_number_one.pdf |
Again a lengthy hiatus, but we return with good intentions to get back on track.
The present issue is titled "purification" because we were still hoping to get it out in February. The theme is illustrated by a discussion of three or four cases we have been following for quite a long time, each of which is finally winding down. And each of which reprises one of Jack's fixations, folks trying to game the system and in the end maybe not quite getting away with it.
The present issue is titled "purification" because we were still hoping to get it out in February. The theme is illustrated by a discussion of three or four cases we have been following for quite a long time, each of which is finally winding down. And each of which reprises one of Jack's fixations, folks trying to game the system and in the end maybe not quite getting away with it.
| rr-92-64.pdf |
| rr-77-402.pdf |
volume 5, number 8 - 31 December 2022
| volume_five_number_eight.pdf |
After a hiatus of almost five months, we got this issue in under the wire.
A quick review of what has been happening while we were busy making other plans.
The IRS has reinstated a guidance project on whether basis in assets held in a "grantor" trust is adjusted at the settlor's death, even if the trust is not includible in her estate. The Greystocke Project was among those urging the agency to reinstate the project.
The Tax Court in a reviewed opinion invalidated Notice 2017-10, identifying the syndicated conservation easement as a listed transaction. But IRS immediately launched a project to formalize the Notice in regulations. And the Congress enacted the substance of the Notice as part of the appropriations bill.
Also included in that legislation is the so-called "legacy" IRA, allowing direct contributions from a traditional IRA to fund a charitable remainder trust or a gift annuity. But only once, and only up to 50k. Maybe a foot in the door.
And a cert petition in Oakbrook Land Holdings is on the calendar for the Supreme Court's conference on January 06.
Plus one or two other tidbits.
A quick review of what has been happening while we were busy making other plans.
The IRS has reinstated a guidance project on whether basis in assets held in a "grantor" trust is adjusted at the settlor's death, even if the trust is not includible in her estate. The Greystocke Project was among those urging the agency to reinstate the project.
The Tax Court in a reviewed opinion invalidated Notice 2017-10, identifying the syndicated conservation easement as a listed transaction. But IRS immediately launched a project to formalize the Notice in regulations. And the Congress enacted the substance of the Notice as part of the appropriations bill.
Also included in that legislation is the so-called "legacy" IRA, allowing direct contributions from a traditional IRA to fund a charitable remainder trust or a gift annuity. But only once, and only up to 50k. Maybe a foot in the door.
And a cert petition in Oakbrook Land Holdings is on the calendar for the Supreme Court's conference on January 06.
Plus one or two other tidbits.
| rr-59-15.pdf |
| rr-56-439.pdf |
| rr-55-303.pdf |
| rr-54-285.pdf |
volume 5, number 7 - 03 August 2022
| volume_five_number_seven.pdf |
Back from a hiatus of almost a dozen weeks, Jack discusses recently released data from 2019 showing the tax benefit of noncash gifts skewed to taxpayers in extremely high income ranges, decries the further uncritical extension of late portability elections to five years, and recalls a time before the Tax Court caved on "Clayton" QTIP elections.
Also, linking comments submitted by the Greystocke Project for the upcoming priority guidance plan.
Also, linking comments submitted by the Greystocke Project for the upcoming priority guidance plan.
| plr_8631005.pdf |
volume 5, number 6 - 17 May 2022
| volume_five_number_six.pdf |
The Treasury and IRS propose an anti-abuse rule to supplement the anti-clawback regs. And somewhat belatedly we have proposed regs updating the actuarial tables for valuing income, annuity, unitrust, and remainder interests. Also a request for recommendations for items to be included in next year's priority guidance plan, to which Jack intends to respond.
But first, another close, caffeinated look at another letter ruling, again having to do with whether a judicial reformation to a pre-1985 multigenerational trust triggers a constructive addition, stripping the trust of its grandfathered status as exempt from the generation-skipping transfer tax. Jack says the ruling seems to overlook a threshold question.
And the 7520 rate for June is up yet another sixty basis points -- a solid two hundred since February. Sharpen your pencils.
But first, another close, caffeinated look at another letter ruling, again having to do with whether a judicial reformation to a pre-1985 multigenerational trust triggers a constructive addition, stripping the trust of its grandfathered status as exempt from the generation-skipping transfer tax. Jack says the ruling seems to overlook a threshold question.
And the 7520 rate for June is up yet another sixty basis points -- a solid two hundred since February. Sharpen your pencils.
volume 5, number 5 - 22 April 2022
| volume_five_number_five.pdf |
Jack critiques last week's oral argument in Pinkert v. Schwab Charitable, and takes undeserved credit for DOJ correcting an error in its amended complaint in Eickhoff. He looks askance at the scaled down version of the "legacy" IRA included in the "Secure 2.0" bill that cleared the House in late March on a nearly unanimous vote. He gives a brief post mortem on CIC Services, which limits IRS' ability to gather info on "transactions of interest."
And he notes that the window is closing rapidly for leveraging the present value of a remainder after a fixed annuity.
And he notes that the window is closing rapidly for leveraging the present value of a remainder after a fixed annuity.
| 030122_e-mail_to_doj_lawyers_re_eickhoff_complaint.pdf |
| pitch.pdf |
volume 5, number 4 - 16 March 2022
| volume_five_number_four.pdf |
The Justice Department sues to enjoin promoters of a "marketed structure" that purports to trap realized gains in a charitable remainder annuity trust. A superseding indictment brings several additional co-conspirators into the criminal prosecution of promoters of an abusive syndicated easement scheme.
We have a split of authority, with the 6th Circuit in Oakbrook Land Holdings sustaining the validity of the "proceeds" reg on judicial extinguishment of a conservation easement. The appropriations bill for fiscal 2022 once again forbids IRS to redefine the limitations on political activity of (c)(4) orgs. And the 7520 rate for April leaps to 2.2 percent.
We have a split of authority, with the 6th Circuit in Oakbrook Land Holdings sustaining the validity of the "proceeds" reg on judicial extinguishment of a conservation easement. The appropriations bill for fiscal 2022 once again forbids IRS to redefine the limitations on political activity of (c)(4) orgs. And the 7520 rate for April leaps to 2.2 percent.
volume 5, number 3 - 24 February 2022
| volume_five_number_three.pdf |
Wired on drip coffee, Jack criticizes a letter ruling in which IRS allowed the late revocation of a 501(h) election, and another mistakenly stating that property subject to a general power would be includible in the holder's estate only if she exercised it.
The 7520 rate will be up forty basis points in March. Having offered a refund, the government will move to dismiss the complaint in Jarrett as moot, briefing to follow. And we have proposed regs on the required minimum distribution rules as altered by the "Secure" Act.
The 7520 rate will be up forty basis points in March. Having offered a refund, the government will move to dismiss the complaint in Jarrett as moot, briefing to follow. And we have proposed regs on the required minimum distribution rules as altered by the "Secure" Act.
volume 5, number 2 - 08 February 2022
| volume_five_number_two.pdf |
Briefing to the 9th Circuit in Pinkert v. Schwab Charitable is complete, and oral argument is set for April 11. An associate in the Chief Counsel's office says a public charity converting to private foundation status does not take a fresh basis in its appreciated assets. A lawyer for the tax matters partner in a "syndicated" easement case explains how they secured a favorable settlement. Chicago law prof Daniel Hemel urges IRS to rescind the 1985 revenue ruling that opened the floodgates to abusive "grantor" trust strategies. And more.
| pinkert_reply_brief.pdf |
| little_horse_creek_order_030221.pdf |
| rr_85-13.pdf |
volume 5, number 1 - 21 January 2022
| volume_five_number_one.pdf |
A three-pager with just a few short items. Still awaiting a result in Oakbrook Holdings, but already seeing some fallout from the 11th Circuit's decision in Hewitt. The Massachusetts supreme court gets it wrong in determining who is a "qualified beneficiary" under that state's version of the uniform trust code. IRS takes a "no rule" position on whether a charitable remainder trust for a spouse qualifies for an estate or gift tax marital deduction if the trustee has discretion to distribute a portion of the unitrust or annuity payout to an exempt org.
| bench_opinion_tot_property_holdings.pdf |
| meyer_reply_brief.pdf |
volume 4, number 9 - 30 December 2021
| volume_four_number_nine.pdf |
Closing the year with some updates on pending litigation on whether a contributor to a donor advised fund has standing to question the sponsor's investment policies, whether an exempt org is an "educational" org for purposes of an exemption from the tax on unrelated business income, whether the transferor of a conservation easement may be compensated for post-contribution improvements in the event of an extinguishment, and more. See you on the other side.
| pinkert_opening_brief.pdf |
| pinkert_response_brief.pdf |
| meyer_opening_brief.pdf |
| meyer_response_brief.pdf |
volume 4, number 8 - 06 October 2021
| volume_four_number_eight.pdf |
A somewhat long form piece on Rev. Proc. 2021-40, in which IRS belatedly wakes up to the fact that in at least nine letter rulings over more than a dozen years they have been giving cover to an abusive arrangement in which a private foundation or a lead trust is holding debt on which disqualified persons are the obligors.
volume 4, number 7 - 24 August 2021
| volume_four_number_seven.pdf |
A day in the life of the qualified appraiser valuing "income" and remainder interests in a split interest trust. Reconstructing a heavily redacted memo from chief counsel to a manager in E&G tax policy. Jack disparages the suggestion that assets in an IDGT should get a basis adjustment at the settlor's death. And more.
Also.
We seem to be building a small library of revenue rulings that are otherwise available only by downloading an entire volume of the Cumulative Bulletin or going behind some paywall. Trying to be judicious here. Two of these relate to a program manager technical advice memo released a couple of weeks ago that we will discuss in the next issue of the Straw.
The third has to do with the question whether assets in an IDGT get a basis adjustment at the settlor's death, on which Jack has a view. Relatedly, an excerpt from the Senate conference committee report on the 1954 revision to the tax Code, having specifically to do with the section 1014 basis adjustment for property acquired from a decedent.
We seem to be building a small library of revenue rulings that are otherwise available only by downloading an entire volume of the Cumulative Bulletin or going behind some paywall. Trying to be judicious here. Two of these relate to a program manager technical advice memo released a couple of weeks ago that we will discuss in the next issue of the Straw.
The third has to do with the question whether assets in an IDGT get a basis adjustment at the settlor's death, on which Jack has a view. Relatedly, an excerpt from the Senate conference committee report on the 1954 revision to the tax Code, having specifically to do with the section 1014 basis adjustment for property acquired from a decedent.
| rev_rul_72-406.pdf |
| rev_rul_73-142.pdf |
| rev_rul_93-79.pdf |
| s._rept_no._1622_83d_cong._2d_sess._4740__1954_.pdf |
volume 4, number 6 - 09 August 2021
| volume_four_number_six.pdf |
A Missouri appeals court affirms an order allowing only a portion of fees and expenses incurred by a remainderman in pursuing a trust construction action. An order dismissing a class action in a district court in California sets the stage for the 9th Circuit federal appeals court to confront the question whether a contributor to a donor advised fund has standing to sue the fund sponsor for mismanagement of fund assets. And two key players in the nonprofit sector openly align themselves with the donor class.
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volume 4, number 5 - 20 July 2021
| volume_four_number_five.pdf |
A brief excursion, by way of the decision in Americans for Prosperity, into the arcana of First Amendment freedom of association jurisprudence. Also, briefing is complete in two separate appeals in two separate circuits from Tax Court decisions disallowing altogether claimed deductions for contributions of conservation easements based on what might be seen as a drafting technicality. And the LB&I division at IRS gears up for what may be a challenge to the "LLC into DAF" scheme we discussed in Jack Straw two comma fourteen.
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volume 4, number 4 - 22 June 2021
| volume_four_number_four.pdf |
Taking a page or two from the last two "greenbook" revenue proposals issued by the Obama administration, the Biden Treasury is proposing to treat a lifetime gift as a realization event. Including a transfer to a split interest trust, to the extent of the present value of the noncharitable interest. We already have draft legislative text to this effect in the Van Hollen bill. Jack anticipates pushback from the nonprofit sector on behalf of the donor class.
The Texas legislature abrogates the rule against perpetuities, despite a provision in that state's constitution forbidding perpetuities and monopolies. Jack offers his sardonic take.
And a couple other items of some note.
The Texas legislature abrogates the rule against perpetuities, despite a provision in that state's constitution forbidding perpetuities and monopolies. Jack offers his sardonic take.
And a couple other items of some note.
volume 4, number 3 - 18 May 2021
| volume_four_number_three.pdf |
After nearly a hundred days' hiatus, we are back, with a somewhat shorter issue focused on a recent chief counsel advice memo advising examinations that an upstream gift by the remaindermen to the life income beneficiary of a QTIP trust was not "reciprocal" to the deemed gift of the remainder on a commutation of the trust. Jack is working through some difficulties with the logic of the memo.
A couple of the documents linked below relate to the question whether a nonfungible token is a "collectible" for purposes of the 28 pct. gains rate. We posted a brief writeup on the subject on LinkedIn a few weeks back.
A couple of the documents linked below relate to the question whether a nonfungible token is a "collectible" for purposes of the 28 pct. gains rate. We posted a brief writeup on the subject on LinkedIn a few weeks back.
| 13432h.rp.201_part1_pp_151-152.pdf |
| confrpt97-215.pdf_pp_239-240.pdf |
| excerpt_fr_doc._84-1786.pdf |
| h._rept._97-201_pp_158-164.pdf |
| rev._rul._69-505.pdf |
| rev._rul._72-243.pdf |
volume 4, number 2 - 09 February 2021
| volume_four_number_two.pdf |
A state appeals court in Texas construes the word "spouse" in an irrevocable trust to refer to a specific individual, not a class subject to open.
A state appeals court in Missouri gives a trustee carte blanche to elect a unitrust conversion of an "income only" trust, regardless what the settlor may have intended.
And we consider whether it might make sense to make only a partial election to claim the "unlimited" deduction for cash gifts to (b)(1)(A) charities during 2020. And how that decision might be affected by the extension of the incentive through 2021. Or more to the point, by the temporary increase in the default limit for cash gifts to 60 pct.
A state appeals court in Missouri gives a trustee carte blanche to elect a unitrust conversion of an "income only" trust, regardless what the settlor may have intended.
And we consider whether it might make sense to make only a partial election to claim the "unlimited" deduction for cash gifts to (b)(1)(A) charities during 2020. And how that decision might be affected by the extension of the incentive through 2021. Or more to the point, by the temporary increase in the default limit for cash gifts to 60 pct.
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| ocshe_partial_summary_judgment.pdf |
volume 4, number 1 - 12 January 2021
| volume_four_number_one.pdf |
IRS finally relegates INGs to category five "no rule" list, pending study and possible formal guidance. The Supreme Court grants cert in two related California donor disclosure cases. Cares Act charitable incentives extended through 2021. Syndicated easement promoters plead guilty to felony conspiracy charges. Chief Counsel says no deduction for premiums on "insurance" against disallowance of deduction for conservation easement.
| 116hr133sa-rcp-116-68_division_e_sections_101_to_124.pdf |
| 116hr133sa-rcp-116-68_division_ee_sections_212_and_213.pdf |
| rpte_comment_letter_re_ir-2007-127.pdf |
| nysba_tax_section_report_1134.pdf |
| rev._rul._77-158.pdf |
| rev._rul._76-503.pdf |
| agee_information.pdf |
| zak_special_master_report.pdf |
volume 3, number 9 - 16 December 2020
| volume_three_number_nine.pdf |
Cert again denied as another state court says a QTIP remainder is taxable in the estate of a resident decedent, though the predeceased spouse had made the election elsewhere. Fairbairn under submission after a virtual bench trial. Not yet clear whether IRS is taking an appeal in Dickinson. The 7520 rate recovers slightly. And SOI data confirms the hollowing out of the middle.
| fairbairn_fidelity_trial_brief_091120.pdf |
| fairbairn_pltf_trial_brief_unredacted.pdf |
| fairbairn_motion_in_limine_5.pdf |
| fairbairn_oppose_in_limine_5.pdf |
| fairbairn_further_oppose_in_limine_5.pdf |
| fairbairn_supplemental_in_limine_5.pdf |
| fairbairn_fidelity_posttrial_brief_111820.pdf |
volume 3, number 8 - 23 November 2020
| volume_three_number_eight.pdf |
Back from a very long break. Something of a long form discussion of the Tax Court memo decision in Dickinson, which may portend closer IRS scrutiny of prearranged sales of contributed property. Another letter ruling allowing the interposition of a single member LLC to deflect what would otherwise be an act of self-dealing. A legislative proposal to defeat the strategy of using an ING to remove tax situs to a zero tax state. And cross-appeals filed in Oakbrook Land Holdings, one of several syndicated easement cases decided on an "improvements" clause.
| rr-77-275.pdf |
| rev_rul_78-197.pdf |
| dickinson_petr_memo_support.pdf |
| dickinson_resp_objection.pdf |
| dickinson_resp_motion_partial.pdf |
| dickinson_petr_objection.pdf |
volume 3, number 7 - 17 July 2020
| volume_three_number_seven.pdf |
A direct challenge to the eleven-factor facts and circumstances test for (c)(4) exempt status. A strategy to "trap" realized gains inside a charitable remainder annuity trust comes under scrutiny. We are one step closer to appellate review of the question whether an "improvements" clause should kill a conservation easement deduction. And the 7520 rate approaches zero.
| freedom_path_complaint_20-1349.pdf |
| rp-97-23.pdf |
volume 3, number 6 - 08 June 2020
| volume_three_number_six.pdf |
Dark money regs finalized, 9th Circuit says estate tax inclusion if settlor predeceases term of GRAT not limited to present value of unexpired term, and IRS says an exchange with a nongrantor trust that triggers "grantor" trust status is itself a nonrecognition event.
| badgley_sj_motion.pdf |
| badgley_17-cv-00877.pdf |
| badgley_opening_brief.pdf |
| badgley_response_brief.pdf |
| badgley_reply_brief.pdf |
| badgley_rehearing.pdf |
| yoder_grat.pdf |
| rr_76-273.pdf |
| rr_82-105.pdf |
| rr_85-13.pdf |
| rr_92-84.pdf |
volume 3, number 5 - 20 May 2020
| volume_three_number_five.pdf |
We have proposed regs clarifying the treatment of excess deductions on termination of an estate or trust in the hands of distributees. A divided Tax Court validates a regulation requiring that the donee of a conservation or facade easement participate "proportionately" in the proceeds of an extinguishment, and an interpretation of that reg forbidding compensation to the transferor for improvements.
Also, more rumination on nuances in the "unlimited" deduction for cash contributions to (b)(1)(A) charities in 2020. The ACGA makes another downward adjustment to its recommended maximum gift annuity rates. And the 7520 rate hits yet another new low.
Also, more rumination on nuances in the "unlimited" deduction for cash contributions to (b)(1)(A) charities in 2020. The ACGA makes another downward adjustment to its recommended maximum gift annuity rates. And the 7520 rate hits yet another new low.
| 2204_and_2205.pdf |
| motion_leave_to_amend.pdf |
| motion_relief_discovery_orders.pdf |
| lechter_v._aprio_complaint.pdf |
volume 3, number 4 - 05 May 2020
| volume_three_number_four.pdf |
The Missouri state supreme court gets it wrong in a case they should have dismissed. IRS cuts a deal with Panera Cares. In yet another ING ruling, the pretense is dropped. And the 7520 rate falls through the floor.
| ali-cle_excerpt.pdf |
| draft_042213_cover.pdf |
| 4128h01.01h.pdf |
| listserv_posting_re_draft_amendment.pdf |
volume 3, number 3 - 08 April 2020
| volume_three_number_three.pdf |
Some subtleties in the charitable incentives included in the third round of COVID-19 stimulus, another batch of ING rulings, the disallowance of operating expenses for cannabis dispensaries, and more.
| fairbairn_order_030220.pdf |
| fairbairn_order_112818.pdf |
| fairbairn_complaint_081018.pdf |
volume 3, number 2 - 25 February 2020
| volume_three_number_two.pdf |
Another batch of ING rulings, another Tax Court decision on noncompliance with the substantiation regs, and a drop in the 7520 rate.
| 12-04171-pbs-142.pdf |
volume 3, number 1 - 06 February 2020
| volume_three_number_one.pdf |
In the annual update to its "no rule" list, IRS takes half a step back on INGs and draws a line on split-interest trusts for which no deductions have been claimed. The Tax Court says flatly you cannot have "substantial compliance" with the substantiation regs unless you disclose your adjusted basis on Form 8283. And a couple other small items.
volume 2, number 15 - 31 December 2019
| volume_two_number_fifteen.pdf |
A brief discussion of the interaction between the repeal of the age limit on making deductible contributions to an IRA and the charitable IRA "rollover." An update on the recent Tax Court decision disallowing altogether a deduction for a conservation easement that included an "improvements" clause. A closer look at a recent letter ruling approving the reformation of a nonqualified testamentary CRUT.
| rr_02-20.pdf |
volume 2, number 14 - 02 December 2019
| volume_two_number_fourteen.pdf |
A somewhat lengthy discussion of a sketchy tax strategy involving the transfer of nonvoting units in an LLC to a donor advised fund, and then some. Also a few quick takes on other recent developments -- we have final regs on "clawback," the Tax Court disallows a nine-digit deduction for a conservation easement because of an "improvements" clause, and more.
| rr-81-282.pdf |
| 106srpt54_pp_27-32.pdf |
| crpt-106srpt201_pp_41-46.pdf |
| crpt-106hrpt478_pp_167-171.pdf |
| amended_complaint_meyer.pdf |
| stipulation_meyer.pdf |
| judgment_meyer.pdf |
| magistrate_report_meyer.pdf |
| motion_to_vacate_meyer.pdf |
volume 2, number 13 - 09 October 2019
| volume_two_number_thirteen.pdf |
The 7520 rate continues to trend down. Connecticut enacts a version of the uniform trust code, but takes the occasion to allow self-settled spendthrift trusts and to extend the "wait and see" period under the statutory rule against perpetuities to eight hundred years.
IRS again allows the modification of a pre-1985 trust in a marginal case. The chief counsel weighs in on valuing the remainder interest in a GRAT funded with publicly traded stock on the eve of a merger announcement.
IRS again allows the modification of a pre-1985 trust in a marginal case. The chief counsel weighs in on valuing the remainder interest in a GRAT funded with publicly traded stock on the eve of a merger announcement.
| rev._rul._59-60.pdf |
volume 2, number 12 - 16 September 2019
| volume_two_number_twelve.pdf |
Rather than continue to defend the rev. proc., the Treasury and IRS have issued proposed regs that would relieve orgs other than (c)(3)s of the obligation to identify substantial contributors. And a notice relieving from penalties anyone who had relied on the rev. proc. in the meantime.
Jack offers his usual two cents.
Americans for Prosperity has filed its petition for cert from the 9th Circuit decision rejecting their challenge on First Amendment grounds to the California state requirement that they disclose substantial contributors.
And Berea College says the proposed regs implementing the excise tax on endowment funds would improperly characterize their students as "tuition-paying," possibly subjecting the college to the tax.
Jack offers his usual two cents.
Americans for Prosperity has filed its petition for cert from the 9th Circuit decision rejecting their challenge on First Amendment grounds to the California state requirement that they disclose substantial contributors.
And Berea College says the proposed regs implementing the excise tax on endowment funds would improperly characterize their students as "tuition-paying," possibly subjecting the college to the tax.
volume 2, number 11 - 14 August 2019
| volume_two_number_eleven.pdf |
A federal court has invalidated the rev. proc. relieving (c)(4)s of the obligation to identify substantial contributors. The ABA Taxation Law section asks for formal guidance allowing late allocations of the temporarily increased exemption from generation-skipping transfer taxes to pre-2018 transfers. And we go deep into the weeds on the "total return" pooled income fund.
| bullock_order_073019.pdf |
| james_grewal_sj_memo_072919.pdf |
| rev._proc._88-53.pdf |
volume 2, number 10 - 26 July 2019
| volume_two_number_ten.pdf |
The "stretch" IRA is not dead yet, even if something like the House bill passes both chambers. We have proposed regs on the 1.4 pct. excise tax on income from endowments held by a handful of private colleges and universities. Three states and a village sue to invalidate the recently finalized regs targeting SALT cap workarounds. And the 7520 rate continues to drop.
| 19-6642_complaint_071719.pdf |
| 19-6654_complaint_071719.pdf |
volume 2, number 9 - 25 June 2019
| volume_two_number_nine.pdf |
The decision in Kaestner Trust is limited to a small subset of its facts. We have final regs on SALT cap workarounds. And Nina Olson says IRS is failing to do the necessary screening on "streamlined" exemption applications.
volume 2, number 8 - 29 May 2019
| volume_two_number_eight.pdf |
We have a result in RERI Holdings, we have more pushback against Rev. Proc. 2018-38, and we have another letter ruling to pick apart.
| joint_letter.pdf |
| bullock_v._irs_first_amended.pdf |
| reply_brief_sj_motion_bullock.pdf |
volume 2, number 7 - 14 May 2019
| volume_two_number_seven.pdf |
A pair of letter rulings allowing a trust beneficiary with a limited appointment power to escape estate tax inclusion of insurance on her life. A lawsuit to force the Treasury and IRS to explain their thinking in allowing (c)(4)s not to disclose their major contributors. And a couple of state court decisions. What is not to like.
| rr_95-58.pdf |
| rr_84-179.pdf |
| rr_73-142.pdf |
volume 2, number 6 - 30 April 2019
| volume_two_number_six.pdf |
A brief recap of oral argument in Kaestner Trust, a questionable decision from an intermediate appellate court in New York, another call for priority guidance projects, and the continuing downward trend of the 7520 rate.
volume 2, number 5 - 15 April 2019
| volume_two_number_five.pdf |
The petitioner has filed its reply brief filed in Kaestner Trust, and we have oral argument tomorrow. The foundation that operated the Panera Cares "pay what you can" cafes is fighting the revocation of its exempt status in the Tax Court. And the Senate Finance Committee leadership has joined the fray on syndicated conservation easements.
| panera_petition_5198-19-x.pdf |
| panera_examiners_report_886-a.pdf |
| panera_form_1023.pdf |
| panera_determination_letter_1045.pdf |
| panera_foundation_990_for_calendar_2012.pdf |
| panera_foundation_financials_2011-2012.pdf |
| oppose_zak_motion_dismiss.pdf |
| oppose_clark_motion_dismiss.pdf |
| reply_ecovest_response_motion_to_strike.pdf |
volume 2, number 4 - 01 April 2019
| volume_two_number_four.pdf |
Another batch of ING rulings, including one with a new wrinkle, and IRS maybe gets it wrong. A lengthy footnote on Kaestner Trust, and some other bits and pieces.
| trust_instrument.pdf |
| bernstein_affidavit.pdf |
| explanation_of_changes_new_york.pdf |
| zak_et_al_complaint.pdf |
| answer_ecovest.pdf |
| motion_to_strike_affirmative_defenses.pdf |
| zak_motion_dismiss.pdf |
| clark_motion_dismiss.pdf |
| ecovest_response_to_motion_to_strike.pdf |
volume 2, number 3 - 18 March 2019
| volume_two_number_three.pdf |
The 9th Circuit decision in Estate of Dieringer "accomplishes a rough justice, but it cannot serve as a coherent precedent." Also, another letter ruling elevating form over substance, some comments submitted on whether excess deductions on termination are "miscellaneous itemized," a downward trend in the 7520 rate, and more.
| e-mail_to_parillo.pdf |
| desoto_chancery_judgment_amended.pdf |
volume 2, number 2 - 05 March 2019
| volume_two_number_two.pdf |
In which we open a can of worms. In light of the recently finalized substantiation regs, do we need to completely rethink how we document the value of the deductible remainder in a charitable remainder trust?
volume 2, number 1 - 16 February 2019
| volume_two_number_one.pdf |
Back on track after the partial shutdown.
A quick glance at some items that have come down during the hiatus, a preview of items we are planning to cover in upcoming issues, and a long form piece on an appeal pending in the Arizona courts from the dismissal of a claim against a decedent's estate.
A quick glance at some items that have come down during the hiatus, a preview of items we are planning to cover in upcoming issues, and a long form piece on an appeal pending in the Arizona courts from the dismissal of a claim against a decedent's estate.
| order_granting_summary_judgment.pdf |
| goddard_letter_061515.pdf |
| kirven_letter_071515.pdf |
| hiatt_affidavit.pdf |
| divorce_decree.pdf |
| divorce_settlement.pdf |
| obituary.pdf |
| decedents_will.pdf |
| stipulation_for_distribution.pdf |
| opening_brief.pdf |
| opening_brief.pdf |
| response_brief.pdf |
| reply_brief.pdf |
| petition_for_review.pdf |
| response_to_petition_for_review.pdf |
volume 1, number 12
| volume_one_number_twelve.pdf |
When might a QTIP remainder not be taxable by the state in which the surviving spouse resides.
volume 1, number 11
| volume_one_number_eleven.pdf |
Somewhat ahead of schedule, because.
volume 1, number 10
| volume_one_number_ten.pdf |
Three short items. What a fortnightly should be.
The Tax Court says the holder under even a very long-term lease cannot claim a facade easement deduction. The chief counsel suggests maybe holding off processing a refund claim premised on portability of the predeceased spouse's unused exclusion amount until after dealing with a request for 9100 relief to allow a late QTIP election as to a portion of the underlying trust. IRS actually denies a request for a set-aside pending litigation, where neither party had asked the court to impose a freeze.
The Tax Court says the holder under even a very long-term lease cannot claim a facade easement deduction. The chief counsel suggests maybe holding off processing a refund claim premised on portability of the predeceased spouse's unused exclusion amount until after dealing with a request for 9100 relief to allow a late QTIP election as to a portion of the underlying trust. IRS actually denies a request for a set-aside pending litigation, where neither party had asked the court to impose a freeze.
volume 1, number 9
| volume_one_number_nine.pdf |
Odds and ends collected over the past few weeks.
A notice saying deductions under section 67(e) are not subject to the suspension of miscellaneous itemized deduction, but asking for comment on whether excess deductions on termination should be. A rev. proc. saying (c)(4)s need no longer report the identities of their substantial contributors, despite language in the regs to the contrary. A letter ruling approving the disclaimer by an appointee under a pre-1977 limited power, and another answering only in part the question whether unspecified transactions that might occur in settlement of the remainder of a QTIP trust distributable entirely to a private foundation would constitute self-dealing.
And briefing is complete in RERI Holdings.
A notice saying deductions under section 67(e) are not subject to the suspension of miscellaneous itemized deduction, but asking for comment on whether excess deductions on termination should be. A rev. proc. saying (c)(4)s need no longer report the identities of their substantial contributors, despite language in the regs to the contrary. A letter ruling approving the disclaimer by an appointee under a pre-1977 limited power, and another answering only in part the question whether unspecified transactions that might occur in settlement of the remainder of a QTIP trust distributable entirely to a private foundation would constitute self-dealing.
And briefing is complete in RERI Holdings.
| response_brief_reri.pdf |
| reply_brief_reri.pdf |
volume 1, number 8
| volume_one_number_eight.pdf |
The best laid plans. I had intended to write up the decision in Sveen v. Melin, but something came up.
The Greystocke Project has scored a modest victory, securing an opinion from the Arizona attorney general to the effect that statutes enacted some years back, one allowing a trust to continue indefinitely if the trustee has a power of sale, and another extending the "wait and see" period to five hundred years, "likely" violate the state's constitutional prohibition of legislation "permitting any perpetuity or entailment."
The Greystocke Project has scored a modest victory, securing an opinion from the Arizona attorney general to the effect that statutes enacted some years back, one allowing a trust to continue indefinitely if the trustee has a power of sale, and another extending the "wait and see" period to five hundred years, "likely" violate the state's constitutional prohibition of legislation "permitting any perpetuity or entailment."
volume 1, number 7
| volume_one_number_seven.pdf |
Pour yourself a cup of joe and let's read through a few private letter rulings together.
An incomplete gift of a remainder interest in artwork -- or is it a completed gift? -- to museums overseas. Transitioning a non-functionally integrated Type 3 supporting org to private foundation status. And modifiiying a pre-1985 trust to convert the "income" payout to a straight unitrust with an ordering rule: does shifting the incidence of tax on realized gains to the "income" beneficiary shift a benefit to a lower generation?
An incomplete gift of a remainder interest in artwork -- or is it a completed gift? -- to museums overseas. Transitioning a non-functionally integrated Type 3 supporting org to private foundation status. And modifiiying a pre-1985 trust to convert the "income" payout to a straight unitrust with an ordering rule: does shifting the incidence of tax on realized gains to the "income" beneficiary shift a benefit to a lower generation?
volume 1, number 6
| volume_one_number_six.pdf |
With issue six, we test the limits of the asterisk signifying "or occasional." A sort of mixed bag here of IRS notices, state legislation, oral argument on an appeal from the Tax Court, and the new ACGA rates. It's good to be back.
| section_11051.pdf |
| crpt-115hrpt-_466_excerpt.pdf |
| majority_summary_excerpt.pdf |
| hc_16_page_9.pdf |
volume 1, number 5
| volume_one_number_five.pdf |
In issue five, we take a break from the long form essay for a couple of shorter pieces, one analyzing a pair of recent letter rulings dealing with the consequences of the misreporting of split gifts to trusts with skip potential, and another briefly discussing a recent Tax Court decision disallowing on what might be seen as a technicality a claimed deduction for the contribution of a conservation easement.
| opening_brief_reri.pdf |
| e-mail_to_committee_re_sb_311_hearing_032818.pdf |
| e-mail_to_french_re_sb_311_consent_calendar_report.pdf |
volume 1, number 4
| volume_one_number_four.pdf |
In issue four, we discuss the recent settlements in five federal lawsuits arising from IRS' use of "inappropriate criteria" to select several hundred applications for exempt status -- mostly from (c)(4) advocacy orgs -- for "heightened scrutiny" to ascertain whether these might be engaged more than insubstantially in political activity. The Justice Department says we are done, but there are still, shall we say, a couple of loose ends.
| amended_complaint_z_street.pdf |
| z_street_application_122809.pdf |
| response_to_ltr_1312.pdf |
| gentry_affidavit.pdf |
| waddell_affidavit.pdf |
| memo_opposing_motion_to_dismiss.pdf |
| memo_not_moot.pdf |
| memo_supporting_motion_to_dismiss.pdf |
| proposed_consent_order.pdf |
| modified_consent_order.pdf |
| linchpins_of_liberty_consent_order_102717.pdf |
| true_the_vote_consent_order_012118.pdf |
| freedom_path_070717.pdf |
| freedom_path_112817.pdf |
| norcal_class_certified.pdf |
| norcal_motion_protective_order.pdf |
| norcal_order_051817.pdf |
| norcal_summary_judgment_motion_memo.pdf |
| norcal_motion_to_seal.pdf |
| norcal_enquirer_motion_to_unseal.pdf |
| norcal_amicus_ohio.pdf |
| norcal_amicus_judicial_watch.pdf |
| lerner_e-mail_to_ingram_012210.pdf |
| lerner_e-mail_to_paterson_110212.pdf |
volume 1, number 3
| volume_one_number_three.pdf |
In the third issue, we look at the Craig Trust controversy now pending argument before the New Hampshire supreme court, and at an eleventh-hour effort to control the outcome through legislation. SB 311 would "clarify" a 2004 statute importing the rules of construction applicable to wills into the trust code, by carving out the pretermitted heirs statute.
| interlocutory_transfer_order.pdf |
| opening_brief_craig.pdf |
| response_brief_craig.pdf |
| reply_brief_craig.pdf |
| amicus_brief_craig.pdf |
| 012104_hearing_hb1224.pdf |
| 041304_hearing_hb1224.pdf |
| 010918_hearing_sb311.pdf |
| sc_7_page_2.pdf |
volume 1, number 2
| volume_one_number_two.pdf |
In the second issue, we examine the decision of the 10th Circuit federal appeals court in Green v. United States, No. 16-6371, reversing an Oklahoma district court that had allowed a trust an income tax charitable deduction under section 642(c) at fair market value for a contribution of appreciated property that had been purchased, it was said, from prior years' income. Copies of the trial court decision and of the briefs on appeal are posted here as well, together with excerpts of the record on appeal discussed in the newsletter.
| 01237_doc_48.pdf |
| green_opening_brief.pdf |
| green_response_brief.pdf |
| green_reply_brief.pdf |
| green_surreply.pdf |
| explanation.pdf |
| 8283s.pdf |
| driskill_memo.pdf |
volume 1, number 1
| volume_one_number_one.pdf |
The first issue, posted here, focuses on the decision of the New Hampshire supreme court in Hodges v. Johnson, No. 2016-0130 (12/12/17), affirming the result, if not the rationale, of a probate court order setting aside a series of purported decantings from two irrevocable trusts and removing the co-trustees. Copies of the trial court decision and of the briefs on appeal are posted here as well, together with the motion for rehearing and the objection to that motion.
| trial_court_order_hodges.pdf |
| opening_brief_hodges.pdf |
| response_brief_hodges.pdf |
| reply_brief_hodges.pdf |
| amicus_brief_hodges.pdf |
| motion_for_rehearing_hodges.pdf |
| objection_to_motion_for_rehearing_hodges.pdf |
| motion_for_leave_to_reply_to_objection_hodges.pdf |
| objection_to_motion_for_leave_to_reply_hodges.pdf |
| rehearing_denied_hodges.pdf |
| morse_v._kraft_466_mass._92__2013_.pdf |