As the subject line suggests, this post announces my intention to start an online newsletter analyzing current developments in the law -- both tax and nontax -- concerning the transfer of private wealth in this country. From my particular perspective, of course, which one might call idiosyncratic.
The working title is Jack Straw. While this was, or may have been, a pseudonym of one of the leaders of the Peasants' Revolt of 1381, the context in which I have selected this name has more to do with what the chancery courts used to call the "feoffee to uses" -- the "straw man" or "straw party," employed to facilitate certain transfers of property. A person of no independent significance, in other words. Maybe that guy from Wichita.
I intend to write up state court decisions as well as decisions of the Tax Court and various federal courts, formal and informal guidance from IRS, proposed regulations, pending legislation.
Not everything, by any means. Just a few selected items that happen to catch my attention. No doubt there will be some focus on the ongoing scramble among the states to abrogate the rule against perpetuities, to promote self-settled spendthrift trusts, and to facilitate decanting as a mechanism for changing the dispositive terms of an irrevocable trust.
But probably I will focus mostly on federal tax law. Right now I am watching for a decision from the 10th Circuit federal appeals in Green. A district court in Oklahoma allowed a trust to claim an income tax charitable deduction under section 642(c) at fair market value for a contribution of property which had been purchased with prior years' income. The government argued the deduction should be limited to adjusted basis, as the appreciation had not been recognized. Oral argument was November 13.
Meanwhile, oral argument before the 9th Circuit in Dieringer should be coming up in March. The Tax Court disallowed an estate tax charitable deduction for a bequest of closely held stock to a private foundation, to the extent the value reported on the 706 exceeded the discounted price at which the corporation later redeemed the stock.
Also watching for briefs in RERI Holdings, for which a notice appeal from the Tax Court to the DC Circuit was filed just the other day. The facts of this case are more complex than I care to summarize here. The curious can glance through Notice 2007-72, published just as IRS getting ready to issue the notice of deficiency, identifying the contribution of a "successor member interest" in a limited liability company as a transaction of interest. Suffice it for the moment to say the taxpayer put together a rather elaborate structure to support a claimed income tax deduction of thirty million plus, but after almost ten years of litigation the court entirely disallowed the deduction on a reporting technicality.
I am thinking the newsletter will be fortnightly, if there is enough material to sustain that frequency. Maybe a couple or three short articles in each issue, with the occasional commentary by Jack Straw himself -- an alter ego who can be rather outspoken in his efforts to demystify the legal profession -- and occasionally a long-form piece, similar in scale to two articles I placed recently in Tax Notes, linked here and here.
So for example in the first issue, sometime in January 2018, I am planning a fairly lengthy piece on the recent decision in Hodges v. Johnson, No. 2016-0130 (N.H. 12/12/17). The New Hampshire supreme court affirmed a probate court order setting aside a decanting that would have had the effect of disinheriting several beneficiaries of a discretionary trust.
The Hodges ruling might be seen as a setback to a sustained lobbying effort on the part of a handful of bankers and lawyers over the past dozen or so years to advance legislation to make New Hampshire "the most attractive legal environment in the nation" for private trusts. The decision is probably "wrong," for reasons articulated in a dissenting opinion, but unless the court grants a motion for rehearing, it might be necessary for these folks to go back to the legislature yet one more time.
I will be distributing a version of this text by e-mail to a roster of potential subscribers, and I will be asking the recipients not only to spread the word, and to let me know if they see anything I might want to write up, but also to offer any technical suggestions as to how this project might best be presented. I am considering Wordpress, but it might be simpler to just add a tab to this site.
For the moment, at least, there will be no paywall.
The working title is Jack Straw. While this was, or may have been, a pseudonym of one of the leaders of the Peasants' Revolt of 1381, the context in which I have selected this name has more to do with what the chancery courts used to call the "feoffee to uses" -- the "straw man" or "straw party," employed to facilitate certain transfers of property. A person of no independent significance, in other words. Maybe that guy from Wichita.
I intend to write up state court decisions as well as decisions of the Tax Court and various federal courts, formal and informal guidance from IRS, proposed regulations, pending legislation.
Not everything, by any means. Just a few selected items that happen to catch my attention. No doubt there will be some focus on the ongoing scramble among the states to abrogate the rule against perpetuities, to promote self-settled spendthrift trusts, and to facilitate decanting as a mechanism for changing the dispositive terms of an irrevocable trust.
But probably I will focus mostly on federal tax law. Right now I am watching for a decision from the 10th Circuit federal appeals in Green. A district court in Oklahoma allowed a trust to claim an income tax charitable deduction under section 642(c) at fair market value for a contribution of property which had been purchased with prior years' income. The government argued the deduction should be limited to adjusted basis, as the appreciation had not been recognized. Oral argument was November 13.
Meanwhile, oral argument before the 9th Circuit in Dieringer should be coming up in March. The Tax Court disallowed an estate tax charitable deduction for a bequest of closely held stock to a private foundation, to the extent the value reported on the 706 exceeded the discounted price at which the corporation later redeemed the stock.
Also watching for briefs in RERI Holdings, for which a notice appeal from the Tax Court to the DC Circuit was filed just the other day. The facts of this case are more complex than I care to summarize here. The curious can glance through Notice 2007-72, published just as IRS getting ready to issue the notice of deficiency, identifying the contribution of a "successor member interest" in a limited liability company as a transaction of interest. Suffice it for the moment to say the taxpayer put together a rather elaborate structure to support a claimed income tax deduction of thirty million plus, but after almost ten years of litigation the court entirely disallowed the deduction on a reporting technicality.
I am thinking the newsletter will be fortnightly, if there is enough material to sustain that frequency. Maybe a couple or three short articles in each issue, with the occasional commentary by Jack Straw himself -- an alter ego who can be rather outspoken in his efforts to demystify the legal profession -- and occasionally a long-form piece, similar in scale to two articles I placed recently in Tax Notes, linked here and here.
So for example in the first issue, sometime in January 2018, I am planning a fairly lengthy piece on the recent decision in Hodges v. Johnson, No. 2016-0130 (N.H. 12/12/17). The New Hampshire supreme court affirmed a probate court order setting aside a decanting that would have had the effect of disinheriting several beneficiaries of a discretionary trust.
The Hodges ruling might be seen as a setback to a sustained lobbying effort on the part of a handful of bankers and lawyers over the past dozen or so years to advance legislation to make New Hampshire "the most attractive legal environment in the nation" for private trusts. The decision is probably "wrong," for reasons articulated in a dissenting opinion, but unless the court grants a motion for rehearing, it might be necessary for these folks to go back to the legislature yet one more time.
I will be distributing a version of this text by e-mail to a roster of potential subscribers, and I will be asking the recipients not only to spread the word, and to let me know if they see anything I might want to write up, but also to offer any technical suggestions as to how this project might best be presented. I am considering Wordpress, but it might be simpler to just add a tab to this site.
For the moment, at least, there will be no paywall.
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