2056A(b)(1) imposes an estate tax on certain taxable events
, including (1) distributions of principal to the surviving spouse; (2) the value of property remaining in the trust at the surviving spouse's death; and (3) the value of property remaining in the trust when the QDT fails to meet any of the Sec.
As originally noted, contributions to a partnership are generally not taxable events
. However, if the partnership meets certain asset value tests and the assetcontributing partner attains diversification as a result of the contribution, the contribution may be taxable.
Late allocations are deemed to precede in time any taxable events
occurring on the date the late allocation is made; a late allocation may be made on a gift tax return reporting another transfer, according to Regs.
corporations (inbound transfers) generally would constitute taxable events
to the shareholders exchanging stock in the transaction (though not to the foreign corporation that liquidated or reorganized).
citizen spouse's estate is the tax on the estate increased by the amount involved in the taxable event
plus prior taxable events
reduced by the tax previously paid.
Also, if an acquiring S corporation owned, for example, 75% of the target for several years and, after the SBJPA, wanted to buy the remaining 25% of the target for voting stock, the B reorganization rules could be met, even though the prior stock acquisitions were taxable events
If the intangible value of client and customer relationships belongs to the individual providing the personal relationship, then the corporation's distributions of clients or customers and any contracts with these individuals are not taxable events
Strategic drafting may provide a partial solution to avoid the devastating effect of paying the tax on distributions (taxable events
) from the QDoT corpus.
* Transactions between a grantor and an IDIT are not taxable events
for income tax purposes.
This tax is derived by taking the tax on the taxable estate of the decedent increased by the aggregate of the QDT taxable events
, here $750,000 ($600,000 + $150,000), and subtracting from it the tax that would have been imposed on the taxable estate excluding the taxable event
, here $600,000 ($750,000 - $150,000).
In addition, for a tax system to be fair and, as important, to be perceived as fair, taxpayers must be able to rely on the extant legislation and regulations at the time that investments are made, business transactions take place, expenditures are incurred, or other taxable events
It's important to keep the parties straight and to identify what facet of Internet activities could give rise to taxable events
. With this understanding, property owners and managers can assess the impact of Internet taxation on their retail tenants.