[EstGift] Materials for Summer Meeting

Tue Jun 26 12:09:38 PDT 2007

Pilgrims: please read over and think about the section 6018 item.  I think the proposal should be non controversial and I think we should have it before the Congress before it tinkers with the estate tax. 

Here is the deal.  Section 6018 tells us when we need to file a 706. It says you have to file if your gross estate MINUS the applicable exclusion amt (reducing the applicable exclusion amt by adjusted taxable gifts) is greater than zero.  That doesn't "work" anymore because the estate and gift tax exemptions are no longer the same. 

For example, I give away $2 million today.
                                                                                                                                                                   I pay gift tax of $335,000  because the gift tax exemption is only $1 million.  I die tomorrow with a gross estate of $1 in my name plus the $335,000 of gift tax, or a total gross estate of $335,001. So the tax base cannot be greater than $335,001 taxable estate plus $2,000,000 adjusted taxable gifts.  The gross tax on $2,335,001 is $931,550. This of course is reduced under section 2001(b) by the $335,000 in gift tax leaving estate tax BEFORE unified credit of $596,550 which is less than the $780,000 unified (applicable)  In other words, no estate tax possibly could be due.  Yet I have to file a 706.

The proposal Mitchell Gans and I make is that I shouldn't have to file if there would be no estate tax due even assuming my gross estate equaled my taxable estate and I had no credit other than the unified credit. 

I'd like to get a vote on this during the meeting. We have a horribly full agenda and I think the matter adequately clear that debate should not really be necessary. 

So I you have a question or comment, please contact me before the meeting. 

Thank you. Jonathan 

----- Original Message -----
From: estgift-bounces at actec.org <estgift-bounces at actec.org>
To: EstGift at actec.org <EstGift at actec.org>
Sent: Mon Jun 25 17:01:28 2007
Subject: [EstGift] Materials for Summer Meeting

Attached, as promised, are the materials for the Salt Lake City  summer
meeting of the Estate and Gift Tax Committee. We have a full agenda with
very timely topics, including a debate between Dennis Belcher and Robert
Slane (the indirect holder of the SOGRAT patent) concerning the pros and
cons of patenting estate planning ideas; possible ACTEC comments on the
proposed section 2053 regs, with Turney Berry as discussion leader
(assuming that he has recovered sufficiently from gall bladder surgery); a
discussion of the proposed section 2036 and 2039 regs. led by Diana Zeydel;
some creative installment sale to grantor trust ideas presented by Jonathan
Blattmachr; a 9100 relief update by Lloyd Leva Plaine and Carol Harrington
(with an attached handout which I strongly recommend); and coverage of the
substantial number of important current developments led by a number of
persons. I look forward to seeing all of you in SLC. Thanks.

(See attached file: ATI_2273797_1_ACTEC - Agenda for Estate and Gift Tax
Commitee Summer Meeting.DOC)

(See attached file: ATI_2275331_1_STEVE LEIMBERG ARTICLE - Tax Return
Preparer Penalties Under the Iraq Appropriations A.DOC)(See attached file:
ATI_2275334_1_STEVE AKERS OF BESSEMER TRUST SUMMARY OF ROSKI.DOC)
(See attached file: ATI_2275197_1_ACTEC SUMMER 2007 MEETING_ Recent
Valuation and Section 2036 Cases.DOC)

(See attached file: Extensions of Time to Make Timely GST Exemption
Allocations V6.DOC)(See attached file: Gans - Section 6018.pdf)(See
attached file: Skip Fox - State Law Developments.DOC)(See attached file:
Zeydel - GRAT Valuation Proposed Regs.DOC)
(See attached file: Minutes of March Meeting.pdf)
Milford B. Hatcher, Jr.
Jones Day
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Suite 800
Atlanta, GA  30309-3053
Telephone:   (404) 581-8510
Telecopy:     (404) 581-8330
Email:  mbhatcher at jonesday.com
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