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List of Forms by Chapter - Chapter 1 — Managing Decedent’s Operating Business and Related Problems
- I. [1.1] Introduction
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II. Estate Administration Matters - [1.2] Appointment of Representative
- [1.3] Business Advisors
- [1.4] Voting Trusts
- [1.5] Appointment of Administrator To Collect
- [1.6] Creditors’ Claims
- [1.7] Collection of Insurance
- [1.8] Purchase or Redemption of Shares
- [1.9] Valuation Matters
- [1.10] Specific Gifts and Bequests
- [1.11] Elective Share of Surviving Spouse
- III. Trust Administration Matters
- [1.12] In General
- [1.13] Choice of Trustee
- [1.14] Business Advisors
- [1.15] Prudent Investor Concerns
- [1.16] Allocation of Business Interests/Trust Funding Matters
- Balancing the Rights of Income and Remainder Beneficiaries — Total Return Trust Legislation
- [1.17] In General
- [1.18] Conversion by Trustee
- [1.19] Conversion by Agreement Between Trustee and Beneficiaries
- [1.20] Conversion by Court Order
- [1.21] Post-Conversion Matters
- [1.22] Additional Administration Powers
- [1.23] Allocations and Funding of Distributions
- [1.24] Court Orders
- [1.25] Application of Legislation
- [1.26] Preservation of S Corporation Status
- IV. Estate Tax Considerations
- [1.27] In General
- [1.28] Timely Filing of Estate Tax Returns
- [1.29] Timely Payment of Estate Taxes Due
- Internal Revenue Code §6166 Considerations
- [1.30] In General
- [1.31] Qualifications
- [1.32] Election
- [1.33] Acceleration of Remaining Payments
- [1.34] Internal Revenue Code §6324A Considerations
- [1.35] Liquidity Considerations
- [1.36] Stock Redemptions and Internal Revenue Code §303
- [1.37] Valuation Matters
- V. Specific Business Arrangements
- VI. Planning Considerations
- [1.44] In General
- Voting Trusts
- [1.45] Description
- [1.46] Trustee Powers
- [1.47] Termination of the Trust
- Buy-Sell Agreements
- [1.48] In General
- [1.49] Cross-Purchase Agreement
- [1.50] Redemption Agreement
- [1.51] Hybrid Agreement
- [1.52] Funding Options
- [1.53] Income Tax Issues
- [1.54] Restrictive Stock-Transfer Agreements
- [1.55] Insurance Trusts
- Split-Dollar Life Insurance
- [1.56] In General
- [1.57] Split-Dollar Agreement
- [1.58] Federal Taxation of Split-Dollar Arrangements Before IRS Notices 2001-10 and 2002-8
- [1.59] IRS Notices 2001-10 and 2002-8
- [1.60] IRS Notice 2002-59
- [1.61] Final Regulations
- [1.62] Internal Revenue Code §409A
- VII. [1.63] Appendix: Sample Internal Revenue Code §6166 Election Form
- Chapter 2 — Handling Family Limited Partnerships and Limited Liability Companies
- I. [2.1] Scope of Chapter
- II. Introduction
- III. Income Tax Issues
- [2.4] Taxation of Year of Death Income
- [2.5] Income in Respect of a Decedent
- [2.6] Income Tax Basis of Decedent’s Interest
- [2.7] Internal Revenue Code §754 Election
- [2.8] Sale or Liquidation of Decedent’s Interest
- [2.9] Carryover of Losses
- [2.10] Internal Revenue Code §704(d) Limitations
- [2.11] Internal Revenue Code §465 At-Risk Rules
- [2.12] Internal Revenue Code §469 Passive Loss Rules
- Pre-Death Issues
- [2.13] Formation of the Partnership
- [2.14] Requirements for Partnership Allocations
- [2.15] Respecting Donees as Partners for Income Tax Purposes
- [2.16] Spousal Partnerships
- [2.17] Holding Periods
- [2.18] Qualified Business Income
- IV. Partnership or Limited Liability Company Issues for Estate
- Planning Asset Distributions
- [2.19] In General
- Basic Rules
- [2.20] No Recognition of Gain or Loss on Current Distributions
- [2.21] Basis of Distributed Property
- [2.22] Reduction in Basis of Partnership Interest from Distributions
- [2.23] Nonrecognition of Gain or Loss by Partnership
- [2.24] Marketable Securities
- Continuation of Entity Under State Law After Death and Its Effect on Partnership
- [2.25] In General
- [2.26] Statutory Provisions
- [2.27] Valuation of Partnership Interests
- [2.28] Treasury Regulations
- [2.29] Discounts in General
- [2.30] Sham Arguments
- [2.31] Buy-Sell Agreements
- [2.32] Internal Revenue Code §2703 as Tool of Internal Revenue Service To Challenge Family Limited Partnership Discounts
- V. [2.33] Internal Revenue Code §2036 Retained Interest Argument
- VI. [2.39] Gift Tax Issues
- Chapter 3 — Income Taxation of Decedents’ Estates and Trusts
- I. In General
- [3.1] Tax Law Changes Impacting Estates
- [3.2] Income Tax Changes
- [3.3] Income Tax — Medicare Surtax
- [3.4] Estate Tax Changes
- [3.5] State of Illinois Tax Changes
- [3.6] Anti-Clawback and Proposed “Anti-Abuse” Clawback Regulations
- [3.7] Proposed Regulations Regarding Certain Estate Tax Deductions
- [3.8] Scope of Chapter
- [3.9] Reporting Appointment of Personal Representative
- [3.10] Obtaining Taxpayer Identification Number
- [3.11] Request for Prompt Assessment
- II. Decedent and Spouse
- [3.12] Review of Income Taxes Paid by the Decedent Before Death
- [3.13] Advantages of a Joint Return for the Year of the Decedent’s Death
- [3.14] Allocation of Income and Deductions to the Decedent’s Final Return
- [3.15] Constructive Receipt and Income in Respect of a Decedent
- [3.16] Procedural Problems in Connection with the Fiduciary Return
- [3.17] Internal Revenue Code §645 Election To Combine Estate and Revocable Trust
- [3.18] Selection of a Fiscal Year for the Estate
- [3.19] Selection of an Estate Tax Valuation Date
- [3.20] Tax Characteristics of Property Acquired from the Decedent
- [3.21] Basis
- [3.22] Holding Period
- IV. Deductions
- [3.23] Deductions That May Be Taken on Either the Estate Tax Return or the Fiduciary Income Tax Return
- [3.24] Factors Involved in Selecting the Proper Return
- [3.25] Dividing Deductions Between Different Returns
- [3.26] Procedural Problems in Obtaining Deductions on the Proper Return
- [3.27] Double Deductions — Deductions That Can Be Taken on Both the Estate Tax Return and an Income Tax Return
- [3.28] Tax Consequences of Paying Representative’s Fee
- Checklist
- [3.29] Deductible Expenses
- [3.30] Nondeductible Expenses
- [3.31] Exemptions and Exclusions
- V. Income and Deductions in Respect of a Decedent
- [3.32] Application of Income in Respect of a Decedent Rules to Specific Types of Income
- [3.33] Taxation of Income in Respect of a Decedent
- [3.34] Deductions in Respect of a Decedent
- [3.35] Internal Revenue Code §691(c) — Income Tax Deduction for Federal Estate Tax Attributable to Income in Respect of a Decedent
- [3.36] Deduction for Generation-Skipping Transfer Taxes
- [3.37] Planning for Income in Respect of a Decedent and Deductions in Respect of a Decedent
- VI. Distributions
- [3.38] General Principles of Taxation of Distributions from an Estate
- [3.39] Distributable Net Income
- [3.40] Separate Share Rule
- [3.41] Significance of Fiduciary Accounting Income
- [3.42] Estate’s Deduction for Income Distributed
- [3.43] Type of Income Distributed
- [3.44] Income Distributed as Part of Distributions of Principal
- [3.45] Distribution of Income Earned Subsequent to Distribution Date
- [3.46] Application of These Principles to the Fiduciary Income Tax Return
- [3.47] Withholding
- [3.48] Disclaimers
- [3.49] Internal Revenue Code §303 Redemption
- [3.50] Installment Sales
- [3.51] Problems in Planning Distributions to Residuary Beneficiaries
- [3.52] Distributions to Low-Income Beneficiaries
- [3.53] Distributions to Wealthy Beneficiaries
- [3.54] Distributions to Trusts Distributing All Income Currently
- [3.55] Tax Benefits and Problems of Non-Pro Rata Distributions
- [3.56] Tax Benefits and Problems of Nonsimultaneous Distributions
- [3.57] Legality of Non-Pro Rata and Nonsimultaneous Distributions Under State Fiduciary Law
- [3.58] Distributions from an Estate in Payment of Pecuniary Legacies
- [3.59] Effect on Beneficiaries’ Basis of Representative’s Decisions Concerning Distributions
- VII. Termination of Estate
- VIII. [3.64] Other Trust Issues
- IX. Illinois Income Tax
- Chapter 4 — United States Estate (and Generation-Skipping Transfer) Tax Returns
- I. [4.1] Introduction
- [4.2] Filing Guidelines
- [4.3] Due Dates for the Return
- [4.4] Due Dates for Payment
- [4.5] Where To File and What Is Considered Timely
- [4.6] How To File
- [4.7] How Familiar Does a Practitioner Need To Be To Prepare an Estate Tax Return?
- [4.8] Dealing with the Client
- [4.9] Documents To Obtain Prior to Preparation of Estate Tax Return
- [4.10] Documents Required on Audit
- [4.11] Dealing with the Executor’s Personal Liability
- [4.12] Prompt Determination Letters: What They Do and Do Not Do
- [4.13] Timelines
- [4.14] IRS Form 56, Notice Concerning Fiduciary Relationship
- II. [4.15] Preparation of Federal Estate Tax Return
- [4.16] State Death Tax Deduction
- [4.17] Schedule A
- [4.18] Schedule B
- [4.19] Valuation on Recognized Market
- [4.20] Blockage Discount
- [4.21] Closely Held Interests
- [4.22] Marketability Discount
- [4.23] Minority Interest Discount
- [4.24] Effect of Built-In Gain
- [4.25] Key-Person Discount
- [4.26] Control Premium
- [4.27] Valuation Penalties
- [4.28] Schedule C
- [4.29] Schedule D
- [4.30] Schedule E
- [4.31] Schedule E, Part 1: Qualified Joint Interests
- [4.32] Schedule E, Part 2: All Other Joint Interests
- [4.33] Schedule F
- [4.34] Schedule G
- [4.35] Schedule G, Item A
- [4.36] Schedule G, Item B
- [4.37] Transfers Under Internal Revenue Code §2036
- [4.38] Transfers Under Internal Revenue Code §2037
- [4.39] Transfers Under Internal Revenue Code §2038
- [4.40] Schedule H
- [4.41] Schedule I
- [4.42] Schedule J
- [4.43] Schedule J, Part A: Funeral Expenses
- [4.44] Schedule J, Part B: Administrative Expenses
- [4.45] Schedule K
- [4.46] Schedule L
- [4.47] Schedule M
- [4.48] Schedule O
- [4.49] Schedule P
- [4.50] Schedule Q
- [4.51] Schedules R and R-1
- [4.52] Schedule T
- [4.53] Schedule U
- [4.54] Schedule PC
- III. Tax Planning and Elections Pertinent to the Preparation of a Federal Estate Tax Return
- [4.55] In General
- [4.56] Use of Qualified Disclaimers Under Internal Revenue Code §2518
- [4.57] Creating the Credit-Shelter Trust
- [4.58] Ensuring the Marital Deduction
- [4.59] Qualifying Property for Charitable Deduction
- [4.60] Complying with the Disclaimer Rules
- [4.61] Deduction Elections and Hubert
- [4.62] Qualified Family-Owned Business Deduction
- [4.63] Special-Use Valuation of Real Estate
- [4.64] Formula Valuation
- [4.65] Election Required
- [4.66] Protective Election
- [4.67] Recapture
- [4.68] Selection of Valuation Date
- [4.69] How To Elect Alternate Valuation
- [4.70] Whether To Elect Alternate Valuation
- [4.71] How To Value Assets on Alternate Valuation
- [4.72] Planning for the Audit or Non-Audit
- [4.73] Unanswered Questions of Law on the Return: How Should They Be Approached?
- IV. Post-Payment Procedures
- [4.74] Inertia vs. Attention
- [4.75] New Information Uncovered on Deductions or Assets Not Disclosed on Filed Return
- No Decision Received from the Internal Revenue Service for Long Period of Time After Filing
- [4.76] Statute of Limitations
- [4.77] Transferee Tax Liability
- [4.78] Closing Letters and Account Transcripts
- [4.79] Is This a Form Letter or an Audit: What Happens When the Internal Revenue Service Reviews the Return?
- [4.80] Audit
- [4.81] Attorneys’ Fees and Fee Declaration for Audit
- [4.82] 30-Day Letter and Appeal Rights
- [4.83] 90-Day Letter and Court Action
- [4.84] Claim for Refund of Tax
- [4.85] Extension of Payment Due Date for Reasonable Cause
- Extending Payment for Closely Held Businesses Qualifying Under Internal Revenue Code §6166
- [4.86] Qualification
- [4.87] Payout Period
- [4.88] Passive Assets
- [4.89] Reasons for Electing Internal Revenue Code §6166 Treatment
- [4.90] Interest
- [4.91] Avoiding Acceleration
- [4.92] Completion of the Form
- [4.93] Postponement Related to Reversionary or Remainder Interests in Trusts
- [4.94] Interest
- [4.95] Noncompliance Penalties
- [4.96] Failure-To-File and Failure-To-Pay Penalties
- [4.97] Accuracy and Related Penalties
- [4.98] Negligence
- [4.99] Substantial Estate or Gift Tax Valuation Understatement
- V. Appendix
- Chapter 5 — Illinois Estate and Generation-Skipping Transfer Tax
- I. Introduction
- II. Illinois Estate and Generation-Skipping Transfer Tax
- [5.4] Preliminaries
- Imposition of Illinois Tax
- [5.5] Essential Elements of the Illinois Estate Tax Base
- [5.6] Step One: Inclusion and Valuation of Assets Transferred
- [5.7] Step Two: Federal Credit for State Death Taxes in 2001
- [5.8] Effect of Prior Taxable Gifts
- [5.9] Marital Deduction
- [5.10] Tax Situs and Apportionment of Tax
- Illinois Generation-Skipping Transfer Tax
- [5.11] Calculation of Illinois Generation-Skipping Transfer Tax
- [5.12] Tax Situs and Apportionment of Illinois Generation-Skipping Transfer Tax
- III. Preparation and Filing of Illinois Estate and Generation-Skipping Tax Return
- [5.13] Preparation of Return
- [5.14] Who Files and Who Pays
- [5.15] Filing Return and Due Dates
- [5.16] Payment of Tax
- [5.17] Reimbursement for Taxes Paid (Apportionment of Liability)
- [5.18] Deferral and Installment Payments
- [5.19] Interest
- [5.20] Penalties
- [5.21] Refunds
- [5.22] Tax Dispute Resolution
- [5.23] Personal Liability
- [5.24] Collection
- Liens
- [5.25] In General
- [5.26] Lien for Property Valued Under Internal Revenue Code §2032A
- IV. Illinois Inheritance Tax and §25 Refunds
- Robert S. Held
Robert S. Held
Robert S. Held, a partner at Harrison & Held, LLP, is a litigator who represents corporate and individual fiduciaries – as well as beneficiaries – in complex estate and trust disputes. Rob’s published articles include “Temporary Guardians Are Not Always Temporary,” an article published by the Illinois State Bar Association which concerns an appellate court’s failure to exercise jurisdiction over guardians who are appointed temporarily but who serve substantially longer than the statutory limit of 120-days. Mr. Held is a board member for Chicago Appleseed Fund for Justice and is the Past Chair of the Chicago Bar Association’s Federal Taxation Committee. He received his B.A. from the State University of New York at Buffalo, his M.B.A. from Eastern New Mexico University, and his J.D. from DePaul University.
- Emily J. Kuo
Emily J. Kuo
Emily J. Kuo is a Partner with Harrison & Held, LLP, in Chicago, where she concentrates her practice on trusts and estates. Ms. Kuo is a Fellow at the American College of Trust and Estate Counsel and a Member of the Leading Lawyers Network in Trust, Will & Estate Planning Law. She received her J.D. from the University of Chicago Law School and her B.S. with highest distinction from the University of North Carolina at Chapel Hill.
- John C. Luchristt
John C. Luchristt
John C. Luchristt is an associate at Chapman and Cutler LLP in Chicago, where he focuses his practice on trusts and estates. He is a member of the ABA’s Real Property, Trust, and Estate Law Section. He received his B.A. from Rutgers University, his M.B.A. from American University Kogol School of Business, and his J.D. cum laude from American University Washington College of Law.
- Shawn M. McCullough
Shawn M. McCullough
Shawn M. McCullough is an associate at Harrison & Held, LLP, in Chicago, where he focuses his practice on estate planning, estate and trust administration, and business succession. He is a member of the Chicago Estate Planning Council and the Illinois State and Chicago Bar Associations. He is also a Certified Public Accountant. Mr. McCullough received his B.S. from Indiana University and his J.D. from the Chicago-Kent College of Law.
- Edward M. Tjaden
Edward M. Tjaden
Edward M. Tjaden is an associate at Bryan Cave Leighton Paisner LLP, in St. Louis, where he focuses his practice on estate planning and fiduciary litigation. Mr. Tjaden is a member of the Illinois, Missouri, and American Bar Associations. He received his J.D. magna cum laude and Order of the Coif from Washington University School of Law and his B.A. from Eastern Illinois University.
- Rebecca Wallenfelsz
Rebecca Wallenfelsz
Rebecca Wallenfelsz is a Partner at Chapman and Cutler LLP in Chicago, where she focuses her practice on trusts and estates. She is a member of the American College of Trust and Estate Counsel and the American Bar Association’s Section on Real Property, Probate, and Trust Law, and she was named to the Law Bulletin Publishing Company’s 40 Illinois Attorneys Under Forty to Watch list (2011). Wallenfelsz received her B.A. cum laude from the University of Notre Dame and her J.D. cum laude from Loyola University Chicago School of Law.
- H. Randolph Williams
H. Randolph Williams
H. Randolph Williams is a Partner at Williams & Baerson, LLC, in Chicago, and focuses his practice on estate planning and tax. Mr. Williams is a Fellow of the American College of Trust and Estate Counsel and a Member of the Chicago Estate Planning Council and the Society of Trust and Estate Practitioners. He received his J.D. from Southern Methodist University and his LL.M. from New York University.
Estate Administration: Business and Tax-Related Issues 2022 Edition
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