Gift Tax Research Articles

A Study on Taxation Treatment Direction of the Future Interest for Taxation of Trust ―Focusing on Inheritance Tax and Gift Tax Law―

A Study on Taxation Treatment Direction of the Future Interest for Taxation of Trust ―Focusing on Inheritance Tax and Gift Tax Law―

비상장주식 가치평가의 합리적 적용방안에 관한 연구

국내외 기업환경이 급격하게 변화하면서 기업의 인수․합병, 주식의 양도․양수 등 자산의 거래가 다양하고 활발하게 이루어지고 있으며, 이러한 거래 시 자산의 가치를 합리적, 객관적으로 평가할 필요성이 크게 증대되고 있다. 비상장주식의 경우 가격이 객관적으로 결정되는 시장이 부재하므로 비상장기업의 주식가 실제 주식가격과의 괴리가 발생하며 따라서 이를 객관적으로 평가하는 데 어려움이 있다. 비상장주식의 평가기법은 과세 및 행정의 편의를 위한 일률적 평가방식에서 벗어나야 하며 평가대상기업에 따라 적절한 평가기법을 선택할 수 있도록 하는 평가기준의 확립이 필요한 상황이다. 따라서 본 연구에서는 법령상 제시된 평가기법외의 이론 또는 실무상 언급되고 있는 다양한 평가모형을 사례와 함께 제시하여 실제 주식가치에 근접할 수 있는 가치평가기법을 제안하였다.

A Simplified Verifiable Gift Tax

The purpose of this article is to propose a simpler verifiable gift tax, to reassert basic principles of transfer taxes, to encourage simple, outright gifts, and to eliminate some of the major abuses in the current gift tax regime. To accomplish these goals, the proposed tax would simplify gift completion rules, adopt a hard-to-complete rule of transfer taxation, reduce the annual exclusion while expanding the consumption exclusion, and employ loss of preference inducements to increase gift tax compliance.

2009 Federal Tax Update

This paper examines significant developments in the federal income, gift, and estate taxation of individuals and small businesses from August, 2008, through August, 2009. It covers important cases, rulings, regulations, and legislation during this period. This paper generally does not address developments in the areas of qualified plans or the taxation of C corporations (except to limited extents).

2011 Federal Tax Update

This update explains several developments in the substantive federal income, estate and gift tax laws affecting individual taxpayers and small businesses. It contains summaries of significant cases, rulings, regulations, legislation and other matters from August, 2010, through August, 2011. This update generally does not discuss developments in the areas of qualified plans or the taxation of business entities (except to a very limited extent).

2008 Federal Tax Update

This update explains several developments in the substantive federal income, estate and gift tax laws affecting individual taxpayers and small businesses. It contains summaries of significant cases, rulings, regulations, legislation and other matters from August, 2007, through August, 2008. This update generally does not discuss developments in the areas of qualified plans or the taxation of business entities (except to a very limited extent).

Federal Tax Update: Important Developments in Federal Income, Estate & Gift Taxation Affecting Individuals - August, 2006 to August, 2007

This update explains several developments in the substantive federal income, estate and gift tax laws affecting individual taxpayers and small businesses. It contains summaries of significant cases, rulings, regulations, legislation and other matters from August, 2006, through September, 2007. This update generally does not discuss developments in the areas of qualified plans or the taxation of business entities (except to a very limited extent).

2006 Federal Tax Update

This update explains several developments in the federal income, estate and gift taxes affecting individual taxpayers and small businesses. It contains summaries of significant cases, rulings, regulations, legislation and other matters from August, 2005, through September, 2006. This update generally does not discuss developments in the areas of qualified plans or the taxation of business entities (except to very limited extents).

2010 Federal Tax Update

This update explains several developments in the substantive federal income, estate and gift tax laws affecting individual taxpayers and small businesses. It contains summaries of significant cases, rulings, regulations, legislation and other matters from August, 2009, through September, 2010. This update generally does not discuss developments in the areas of qualified plans or the taxation of business entities (except to a very limited extent).

Intergenerational Transfers Under an Uncertain Estate Tax

The paper examines the pattern of lifetime transfers during a period of uncertainty in estate taxation where the tax was set to expire, reintroduced, and its reach curtailed. More specifically, it examines lifetime gifts made during the past decade, with a focus on the size and frequency of transfers over the period 2002-2012. Using data from gift tax returns, reported lifetime taxable gifts over the years 2002-2009 were in the range of $20 to $30 billion per year. But, by 2012, these taxable gifts (which are in excess of the annual exclusion) increased to an unprecedented level of $440 billion. These transfers represent significant acceleration in bequests, and may very well have serious implications for future tax revenues, as well as the observed distribution of income and wealth. Equally important, the findings also provide further support for the bequest motive as these lifetime transfers cannot be accidental in nature.

ADMINISTRATIVNÍ NÁKLADY MAJETKOVÝCH DANÍ V ČESKÉ REPUBLICE

The paper deals with the efficiency of property taxes in the tax system of the Czech Republic, focusing on the administrative costs of taxation on the timeline 2005 to 2008. It contains a theoretical definition of tax efficiency, and describes the types of costs connected with taxes. From this perspective it focuses on quantifying the direct administrative costs of inheritance tax, gift tax, property transfer tax and property tax. Direct measurement of administrative costs is done by using the method called WTE staff which classifies employees of regional financial institutions in separate groups and assigns each group a specific number of employees for each reference property taxes using the conversion factors. Then it defines the total expenditure of regional financial institutions using the coefficients for a particular monitored tax and it provides administrative costs as a percentage of property tax receipts. Finally, the results of measurements indicating the proposed amendment are discussed.

The scope of the special rules in The Inheritance Tax and Gift Tax Act for the assessment on the property transferred for security(in case the collateral security is established on the day of giving) - in view of the Supreme Court case of 2013Du1850 -

The scope of the special rules in The Inheritance Tax and Gift Tax Act for the assessment on the property transferred for security(in case the collateral security is established on the day of giving) - in view of the Supreme Court case of 2013Du1850 -

Gift Tax Obligations of Residents where Residents transfer shares in foreign corporations under nominal trust to foreign corporation

Gift Tax Obligations of Residents where Residents transfer shares in foreign corporations under nominal trust to foreign corporation

A Study on the problems of the Gift Tax Act System based on the Complete Negative System - Focused on the Constructive Gift for Normal trust -

A Study on the problems of the Gift Tax Act System based on the Complete Negative System - Focused on the Constructive Gift for Normal trust -

The Optimal Basis Increase Trust: Exploiting Opportunities to Maximize Basis, Lessen Income Taxes and Improve Asset Protection for Married Couples after ATRA (Or: Why You'll Learn to Love the Delaware Tax Trap)

In Part I, the author describes the main income tax problems with the current design of most AB trusts in light of portability and the new tax environment – and problems with more simplified estate plans. Part II describes potential solutions to the basis issue, including the use of various marital trusts (and the key differences between them), and why these may also be inadequate. Part III explores how general and limited powers of appointment and the Delaware Tax Trap can achieve better tax basis adjustments than either outright bequests or typical marital or bypass trust planning. The paper refers to any trust using these techniques as an Optimal Basis Increase Trust (OBIT). Part IV discusses how these techniques accommodate disclaimer based planning (or disclaimers from lack of planning). Part V discusses how married couples can achieve a double step up at first death without living in a community property state and how to benefit from upstream planning for basis increases.Part VI discusses new asset protection opportunities opened up by the increased gift tax exclusion. Part VII discusses the tremendous value of applying OBIT techniques to pre-existing irrevocable trusts. Lastly, Part VIII discusses various methods to ensure better ongoing income tax treatment of irrevocable trusts – not just neutralizing the negatives of trust income taxation, but exploiting loopholes and efficiencies unavailable to individuals, including how a taxpayer might get an above the line deduction for gifting to their children. These techniques include using trust provisions to make income taxable to a beneficiary, lifetime powers of appointment, regulations that permit capital gains to be taxed to a beneficiary and charitable deductions available to trusts.These techniques taken together are referred to as an Optimal Basis Increase and Income Tax Efficiency Trust.

How does the estate tax affect the number of firms?

Purpose– The purpose of this paper is to estimate the effect of the combined (Federal and state) estate, inheritance, and gift (EIG) tax burden per decedent on the number of firms in the USA.Design/methodology/approach– Estimates are based on a longitudinal panel of 50 American states from 1988 to 2006.Findings– The paper finds that the growth in the EIG tax burden per decedent significantly reduces the growth in the number of firms, especially small firms. The higher dissolution rate among small firms can be attributed to the asymmetric liquidity effect, which limits the ability of small business owners to raise the funds needed to pay the estate tax without liquidating their estates.Practical implications– The estimates suggest that the reductions in EIG taxes, brought about by the passage of 2001 EGTRRA, have lead to a higher growth in the number of firms, ceteris paribus.Social implications– As of this writing, the future of the Federal estate tax looks uncertain. Policymakers should note that the estate tax lowers competition and economic growth, which hurts both the poor and the rich.Originality/value– This study is the first to examine the impact of the combined (Federal and state) EIG tax burden on the number of firms using state-level panel data.

Exercise of Preferential Right to Acquire Shares Issued in a Debt-to-Equity Swap and Gift Tax

Exercise of Preferential Right to Acquire Shares Issued in a Debt-to-Equity Swap and Gift Tax

Research on Unified Application of Tax Laws related Contractual Rescindment on Capital Gain Tax, Gift Tax and Acquisition Tax

Research on Unified Application of Tax Laws related Contractual Rescindment on Capital Gain Tax, Gift Tax and Acquisition Tax

Review of 2013 “Income Tax Law” and “Inheritance and Gift Tax Law” Cases

Review of 2013 “Income Tax Law” and “Inheritance and Gift Tax Law” Cases

When Heirs Become Major Shareholders: Evidence on Tunneling and Succession Through Related-Party Transactions

In family firms, the succession of controlling equity stake to next generation is an issue of paramount importance. This, however, can be a major challenge in the presence of heavy inheritance or gift tax burden (high tax rate and absence of tax-saving vehicles, such as trusts or foundations) and in the absence of dual-class equity. Such regulatory environment may lead families to seek alternative ways of succession. As for families controlling business groups, one way of doing so is making use of related-party transactions among member firms. By favoring firms where the heir holds significant equity stake, the family can tunnel corporate resources to the heir. Eventually, the firm can grow large enough to acquire controlling equity stakes in other firms within the group. In this paper, we investigate this possibility using Korean chaebol firms during a sample period of 2000-2009. We identify firms where heirs become a major shareholder (treatment group) and compare them against their year-industry-size-matched firms (control group) before and after the ownership change. Difference-in-differences test with firm fixed effects reveal that treatment group firms experience greater related-party transactions, benefit from them in terms of earnings, pay out more dividends, and become more important in controlling other firms in the group.