Monday, November 11, 2013

Estate of Cristofani v. Commissioner case brief

Estate of Cristofani v. Commissioner case brief summary
97 T.C. 74 (1991)


CASE SYNOPSIS
Petitioner estate sought review of the decision of respondent Commissioner of Internal Revenue ("IRS"), who disallowed exclusions under 26 U.S.C.S. § 2503(b) for payments by the estate to decedent's grandchildren.

CASE FACTS


  • Decedent executed an irrevocable trust to her two children. 
  • Under the terms of the trust, her two children, as trustees, could each withdraw an amount not to exceed the amount specified for the gift tax exclusion under 26 U.S.C.S. § 2503(b). 
  • Decedent died before she made two $ 70,000 transfers into the trust. 
  • These transfers were not reported on federal gift tax returns. Instead, estate claimed them as annual exclusions for two years under § 2503(b)to her children and five grandchildren, who held contingent remainder interests in the trust. 
  • The IRS disallowed the exclusions for decedent's grandchildren. 
  • The estate sought review of the IRS' decision. 
DISCUSSION

  • The court found that the estate was entitled to the exclusions for decedent's grandchildren because their right to withdraw an amount not to exceed the § 2503(b) exclusion represented a present interest for the purposes of § 2503.

CONCLUSION
The court decided that the estate was entitled to gift tax exclusions for decedent's grandchildren because their right to withdraw an amount from decedent's trust not to exceed the gift tax exclusion represented a present interest for the purposes of the gift tax exclusion.



Suggested Study Aids For Wills, Trusts & Estate Law

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