Internal Revenue Rulings
 Final Rules Issued on Alternate Valuation Date Election for Gross Estate Effective January 4, 2005
The regulations amend Section 20.2032-1(b) and remove temporary regulation Section 301.9100-6T(b) to allow estates to request an extension of time to make the election under the provisions of Sections 301.9100-1 and 301.9100-3 if they have failed to make the alternate valuation election on the last estate tax return filed before the due date of the return or on the first estate tax return filed after the due date of the return.
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IRA Rollover Requests Denied Two Taxpayers Who Used Funds for Personal Expenses, Granted to Handicapped Taxpayer Whose Attorney Did Not Complete Application On Time
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IRS Issues Rev Proc 2004-71, 2004-50 IRB Specifying 2005 Inflation Adjustments
35% tax bracket threshold is $326,450 for joint returns and surviving spouses, as well as for single taxpayers. Phase out for married couples filing jointly starts at $218,950, $145,950 for single taxpayers. The standard deduction is $10,000 for married filing jointly and $5,000 for single taxpayers. Aged and/or blind are entitled additional standard deductions of $1,000 each, increasing to $1,250 if unmarried and not a surviving spouse. Personal exemptions increase to $3,200.
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IRS Rules that Income Taxes Paid by Estate on IRA Distributions Used to Pay Estate Taxes Not Deductible As Claims Against Estate Or As Administrative Expenses Under Section 2053
Decedent died leaving a gross estate that contained multiple IRAs. After paying the estate's debts and expenses, there were insufficient assets to pay the estate tax. Therefore, the estate took distributions from the IRAs in order to satisfy the estate tax liability.
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Deemed Dividends From S Corp Not Income under IRC §643(b), Therefore S Trusts Have No Distribution Obligation
A company that was originally a C-Corp with undistributed profits converted itself to an S-Corp with the intention of distributing its profits to two Qualified Sub-Chapter S trusts under IRC §1361(d)(3). Prior to its conversion to S status, the company had sub-chapter C profits. Now the corporation intends to distribute those earnings and profits to the Qualified Sub-S trusts as a deemed dividend under Reg. §1.1358-1(f)(3), although it will need to borrow to pay a cash dividend to do so. Applicable state law is such that the deemed dividend is not income pursuant to IRC §643(b).
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Trust that provides for distributions of principal in equal installments to ten beneficiaries (eight being qualified charitable organizations) granted extension to make election under IRC §642(c)(1) to claim charitable deductions for its first taxable year.
Ltr Rul 200444003 |
