Updated Friday, November 21, 2014 as of 12:41 PM ET

A Major IRS Estate Tax Loss

There were other interesting technical issues in the case, primarily involving the marital deduction, specifically the qualifying terminable interest property trust. A QTIP trust allows the estate tax marital deduction for a trust that gives the surviving spouse only a life estate. Section 2519, one of the most difficult sections of the Internal Revenue Code to comprehend, triggers a gift tax when any part of a QTIP is assigned. In this case Mrs. Kite was able to reduce the taxable value of the assets in the QTIP trust by investing them in a limited partnership and, as a result, applying a 34.354 percent lack of marketability and minority interest discount. The court recognized that the mere conversion of the property into other property in which she had a qualifying income interest for life is not subject to Section 2519ís gift mechanism.

Get access to this article and thousands more...

All On Wall Street articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.

Already Registered?

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.

Already a subscriber? Log in here