CPWA Intrafamily Transfers of
Business
Federal estate tax exclusion - answer12.92mm in 2023, $25.84mm in 2023 \ law
sunsets in 2025, back to about $6mm/family
3 pools of clients/ after 2017 tax update - answer
_________ where a redemption of the decedent's stock is treated as an exchange and
not a dividend, in cases where more than 35% of the decedent's adjusted gross estate
consists of the stock of the closely held corporation. - answerSection 303
When qualifications are met, __________ allows for one to elect to defer completely for
five years payment of the portion of the estate taxes attributable to the closely held
business interest and thereafter pay the deferred portion of the estate taxes in up to 10
annual installments. - answerSection 6166
The termination of a SCIN does have potentially adverse income tax consequences. A
SCIN works "best" if the seller _______________________. - answer
The business owner (transferor) transfers ownership of the business to the family
member (transferee) in exchange for the transferee's promise (which must be
unsecured) to make payments to the transferor for life. If the _________________ is
structured successfully, there is no gift tax cost and the value of the annuity is not
included in the annuitant's estate. However, if the annuitant's basis is high (such as a
stepped-up basis received by a surviving spouse), the ________________ remains a
viable planning alternative. - answerprivate annuity
These are irrevocable trusts to which the trust grantor (the business owner) transfers
property (some part of the business interest) while retaining the right to receive an
annuity or unitrust interest (i.e., a "qualified interest" within Code Section 2702) for a
fixed term of years. When the term of years expires, the property passes to the
designated remainder beneficiaries of the trust (the business owner's children). -
answerGRAT GRUT
GRATs and GRUTs are only effective to accomplish their intended transfer tax savings
"if" the ______________________. - answergrantor survives term of the trust
This structure is designed to allow an income tax-free sale of property with appreciation
potential to be made to a trust whose beneficiaries are the heirs of the trust grantor. The
appreciation on the property sold to the trust is removed from the trust grantor's estate.
The trust is drafted so that the grantor is treated as the owner of the trust for income tax
purposes, but not for estate tax purposes. This is accomplished by including certain
Business
Federal estate tax exclusion - answer12.92mm in 2023, $25.84mm in 2023 \ law
sunsets in 2025, back to about $6mm/family
3 pools of clients/ after 2017 tax update - answer
_________ where a redemption of the decedent's stock is treated as an exchange and
not a dividend, in cases where more than 35% of the decedent's adjusted gross estate
consists of the stock of the closely held corporation. - answerSection 303
When qualifications are met, __________ allows for one to elect to defer completely for
five years payment of the portion of the estate taxes attributable to the closely held
business interest and thereafter pay the deferred portion of the estate taxes in up to 10
annual installments. - answerSection 6166
The termination of a SCIN does have potentially adverse income tax consequences. A
SCIN works "best" if the seller _______________________. - answer
The business owner (transferor) transfers ownership of the business to the family
member (transferee) in exchange for the transferee's promise (which must be
unsecured) to make payments to the transferor for life. If the _________________ is
structured successfully, there is no gift tax cost and the value of the annuity is not
included in the annuitant's estate. However, if the annuitant's basis is high (such as a
stepped-up basis received by a surviving spouse), the ________________ remains a
viable planning alternative. - answerprivate annuity
These are irrevocable trusts to which the trust grantor (the business owner) transfers
property (some part of the business interest) while retaining the right to receive an
annuity or unitrust interest (i.e., a "qualified interest" within Code Section 2702) for a
fixed term of years. When the term of years expires, the property passes to the
designated remainder beneficiaries of the trust (the business owner's children). -
answerGRAT GRUT
GRATs and GRUTs are only effective to accomplish their intended transfer tax savings
"if" the ______________________. - answergrantor survives term of the trust
This structure is designed to allow an income tax-free sale of property with appreciation
potential to be made to a trust whose beneficiaries are the heirs of the trust grantor. The
appreciation on the property sold to the trust is removed from the trust grantor's estate.
The trust is drafted so that the grantor is treated as the owner of the trust for income tax
purposes, but not for estate tax purposes. This is accomplished by including certain
