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FEDERAL ESTATE & GIFT TAX PROJECT 1 (MEMORANDUM TO GUIDE DISCUSSION OF TAX ADVISORY GROUP DRAFT 5 (1965))

handle is hein.ali/aliftp0323 and id is 1 raw text is: TAX ADVISORY GROUP MEMORANDUM NO. 5
GUIDE FOR DISCUSSION
INTRODUOTION
This guide for discussion is designed to direct your attention to the points in Tax Advisory Group Memoran.
dum No. 5 on which the Reporter particularly desires discussion. It is not the intention to restrict discussion to
these points. Thus anyone should feel free to raise for consideration any part of the Memorandum.
DIVISION I
UNIFIED Tu spi t TAX
1. The Rate Schedule
The rate schedule proposed for the unified transfer tax is set out in § X2, beginning on page 2. Though this
matter was considered in some detail at the last meeting, it is proposed that it be examined again. In connection
with this re-examination, notice the comments on page 11.
2. Fiduciary Safeguards
The safeguards which are available to a fiduciary operating under a unified transfer tax system are found in
§ X5, beginning on page 15. It is hoped that the discussion of these safeguards will disclose additional safeguards,
if any, which should be provided.
3. Executor Liability in Connection with Deferred Tax Payments
Some dissatisfaction has been expressed from time to time in relation- to the executor's position when the pay-
ment of estate taxes is deferred in whole or in part. A suggestion is made in § X7, beginning on page 19, which
would give the executor some relief. The feasibility of this suggestion and the desirability of other 'ypes of relief
will be examined.
4. Disclaimers
An attempt has been made on page 22 and again on page 27 to provide some concrete rules as to what con-
stitutes a disclaimer. The soundness of these rules will be explored.
5. Life Insurance
Even though the present estate tax provisions with respect to life insurance are retained in § Xllc, begin.
ning on page 30, an attempt has been made to solve some problems growing out of the transfer of only part of the
incidents of ownership and the continued payment of premiums by the insured in the light of a unified tax
system. These aspects of the life insurance problem will be surveyed.
6. Current Beneficial Enjoyment
The location of the right to current beneficial enjoyment is vital in applying the provisions of § X23, begin-
ning on page 60, and § X24, beginning on page 66. On page 61, an attempt has been made to define what is meant
by current beneficial enjoyment and at various places in § X23 and § X24 illustrations are given of where current
beneficial enjoyment is under different circumstances. A thorough discussion of this concept is planned in the hope
it will provide additional light as to its meaning.
7. Property Previously Taxed
As a result of the meeting in New Orleans, the provisions of § X29, beginning on page 97, have been redone
and alternative proposals appear under that section. Sentiment in regard to these two proposals will be tested.

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