IRS may revalue gifts for estate tax after gift-tax limitation period is up.In 1981, Alfred Eide made gifts of mineral rights, which he valued at $14,769 on his federal gift tax return. No gift tax was due in 1981 because Eide used up part of his unified credit unified credit A credit used against federal taxes due on estates and large gifts. Under current law, the unified credit is sufficient to offset taxes on values of approximately $1 million in estates and large gifts. against gift tax. Eide died in 1985. In computing estate tax under IRC (Internet Relay Chat) Computer conferencing on the Internet. There are hundreds of IRC channels on numerous subjects that are hosted on IRC servers around the world. After joining a channel, your messages are broadcast to everyone listening to that channel. section 2001, post-1976 taxable gifts not included in a gross estate must be added to the taxable estate Taxable Estate The total value of a deceased person's assets that are subject to taxation - minus liabilities and minus the prescribed tax-deductible portion of assets left behind by the deceased. . Accordingly, in the estate tax calculation on Eide's estate tax return, the $14,769 in taxable gifts was listed as taxable gifts. [CHART OMITTED] In 1986, the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. examined the estate tax return and increased the mineral-rights gifts' value to $135,750, which resulted in a $35,123 increase in estate tax. The estate argued IRC section 2504(c)'s limitation period for revaluing gifts for the gift tax barred revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of the gifts for estate tax purposes. The district court held in favor of the estate. The IRS appealed. Result: For the IRS. The plain language of section 2504(c) applies only to gift taxes, not to estate taxes. Therefore, in reviewing a decedent's estate tax calculation, the IRS may revalue his or her prior taxable gifts. The IRS estate tax assessment in this case was valid. Evanson (8th Cir., 1994). Note: The Fourth Circuit (in Levin lev·in n. Archaic Lightning. [Middle English levene, levin; see leuk- in Indo-European roots.] ) agreed with the Eighth Circuit's conclusion, as did a 1990 Tax Court decision--Smith Est., (94 TC 872) and a district court decision--Stalcup, (DC W. Okl., 1991). However, at least one district court (in Boatmen's First National Bank, DC W. Mo., 1988) refused to allow revaluation of gifts for estate tax purposes when the section 2504(c) period has run. |
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