Friday, February 8, 2013
On February 7, the U.S. Tax Court held that a taxpayer's transfer of partnership interest to her children in exchange for private annuity agreements was not a disguised gift subject to gift tax (Estate of Kite v. Commissioner, T.C., No. 6772-08, T.C. Memo. 2013-43, 2/7/13).
BNA reported that Judge Elizabeth Crewson Paris determined that the annuity transaction was a bona fide sale for adequate and full consideration.
Virginia Kite was the beneficiary of two qualified terminable interest property (QTIP) trusts, one marital deduction trust, and one revocable trust. In 2001, the QTIP trusts and the marital deduction trust were liquidated, and the trusts' assets, which consisted of family partnership interests, were transferred to Kite's lifetime revocable trust. The family partnership interests held by the lifetime revocable trust were then transferred to Kite's three children in exchange for 10-year deferred private annuity agreements.
IRS assessed more than $6 million for Kite's 2001 gift tax, and more than $5 million in estate tax.
Check back with us for updates and appeal information.
Posted by Lindsey W. Cooper Jr. at 8:49 AM
BNA reported yesterday that a bipartisan group of House lawmakers introduced a bill to repeal the Affordable Care Act's 2.3 percent medical device excise tax.
The group of 175 co-sponsors of the proposed Protect Medical Innovation Act (H.R. 523) was led by Reps. Ron Kind (D-Wis.) and Erik Paulsen (R-Minn.); the bill text was not available. The House passed a similar version of the bill in June 2012, but was killed in the Senate.
Bipartisan companion legislation soon will be introduced in the Senate.
“Placing a new tax on the backs of U.S. medical innovators and entrepreneurs who employ more than 400,000 Americans is not a prescription for economic growth or job creation,” Paulsen said in a Feb. 6 statement. “In fact, companies have already laid off thousands of employees as a result of this onerous new tax, and more jobs will be lost now that this tax is in effect. It's not only costing our country jobs and deterring innovation, but more importantly, it will reduce patient access to cutting edge medical products and treatments that save lives.”
Check back with us for updates.
Posted by Lindsey W. Cooper Jr. at 8:46 AM