Also known as: estate and gift taxes · estates and gift tax · estate & gift tax · estate & gift taxes · unified estate and gift tax · transfer tax
Written by attorneys · grounded in primary & secondary sources — see below
A federal tax regime governing gratuitous transfers of property. The regime imposes tax on lifetime gifts above applicable exclusions and on the value of a decedent's estate at death after allowable deductions and credits.
Emma Erickson agreed to transfer her commercial building to Emanuel Escobar by gift. At closing the title agent prepared the deed, closing statement, title commitment, and gift tax forms. The parties executed the documents and the deed was recorded. The gift tax forms ensured the proper reporting and payment of any federal gift tax due on the conveyance above applicable exclusions.
After his father's death Edward Everett inherited real property subject to a federal tax lien. He executed a timely disclaimer under state law. Because the disclaimer was effective for federal tax purposes the property passed directly to the next heirs and was not treated as Edward's property reachable by the lien.
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Courts may modify a donative document when the change achieves the donor's tax objectives and does not violate the donor's probable intention. The modification must be clearly effective under federal law for federal taxes or state law for state taxes.
A timely disclaimer under I.R.C. §2518 prevents the disclaimed interest from being treated as transferred to the disclaimant for federal transfer tax purposes. The interest passes as if the disclaimant predeceased the transferor.
A distribution standard limited to health, education, support, or maintenance is treated as an ascertainable standard. This classification prevents the power from being treated as a general power of appointment that would cause inclusion in the holder's estate for estate tax purposes.
…the Code, which renders qualifying state-law disclaimers “with respect to any interest in property” effective for federal wealth-transfer tax purposes and for those purposes only.[^maj-3] Drye nevertheless refers to cases indicating that state law is the proper guide to the critical determination whether his interest in his…