**REMINDER** IRS Grants Tax Relief for Florida Hurricane Victims-IR-2004-115, Sept. 10, 2004 (Updated 9/13/04 to add 6 counties)

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Internal Revenue Rulings

IRS issues temporary and final regulations allowing Sub-S election for LLC's and other non-corporate entities by filing Form 2553 T.D. 9139

IRS issues Ltr Rul stating that the “inter-related” doctrine established by the US Supreme Court in U.S. v. Estate of Grace , 395 U.S. 316 (1969) does not apply to two irrevocable life insurance trusts between a husband and wife because there were enough differences between them to obviate application of the Grace case.

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IRS puts abusers of conservation easements on notice that enforcement actions will ensue.

Parties who (1) transfer an easement on real property to a charitable organization, or (2) make payments to a charitable organization in connection with a purchase of real property from the charitable organization, may be improperly claiming charitable contribution deductions under IRC § 170 of the Internal revenue Code. In appropriate cases, the Service intends to disallow such deductions and may impose penalties and excise taxes.

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IRS concurs with state court's ruling that ambiguous language in a trust created a general power of appointment; distributions pursuant to it are not subject to GST.

Decedent created a revocable trust that became irrevocable at death and required the creation of two other trusts. The trusts were to be construed and administered according to the laws of decedent's state and a state court gave an opinion regarding ambiguous language in one of the ancillary trusts (the “Family Trust”). A ruling from the Service was requested to confirm that it agreed with the state court's ruling.

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IRS issues proposed rulemaking election out of GST deemed allocations. Proposed Regulation §26.2632-1 .

These proposed regulations provide guidance for making the election under section 2632(c)(5)(A)(i) of the Internal Revenue Code to not have the deemed allocation of unused generation-skipping transfer (GST) tax exemption under section 2632(c)(1) apply with regard to certain transfers to a GST trust, as defined in section 2632(c)(3)(B). The proposed regulations also provide guidance for making the election under section 2632(c)(5)(A)(ii) to treat a trust as a GST trust. A number of examples are included.

From Holland & Knight Private Wealth Services Publications

The Beauty of Those Three Little Words: “No, Thank You”

A disclaimer is a tool that can help meet the changing needs and objectives of families.

Disclaimers have been in favor for centuries. Historically, the purpose of a disclaimer was to prevent certain property from going to a beneficiary's creditors or to the tax collector. Those purposes still stand true today, but the uses for disclaimers have expanded over time as sophisticated estate planners have become more creative and forward-thinking. Given the significant changes in the tax laws since the Economic Growth and Tax Rate Reconciliation Act of 2001 (EGTRRA) and the uncertainty that exists as to the amount at which the estate tax exemption will ultimately be set ($1,500,000 in 2004 but increasing to $3,500,000 in 2009 and returning to $1,000,000 in 2011), the use of disclaimers may be particularly appropriate in many estate plans today.

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