Recent Developments in Tax Law: Highlights from 2015-2016

This update covers key developments in tax law, including the introduction of Section 529A and the Able Act, as well as President Obama's 2016 fiscal proposals. Topics such as estate tax exemptions, GRAT rules, and IRC Section 6166 modifications are discussed, offering insights into the evolving landscape of tax regulations. Stay informed about the changing tax policies that could impact your financial planning.

• Tax law
• Estate tax
• President Obama
• Fiscal proposals
• Financial planning

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1. Heckerling Update 50thAnnual Heckerling Institute, January 2016 PRESENTED BY: Christopher J. Burns 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

2. Perspective 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

3. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

4. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

5. Recent Developments If you missed all of 2015, did you miss anything important? 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

6. Recent Developments 1. Section 529A; ABLE Act a. Available in Minnesota? b. Rulemaking still being refined. Expect to have clear direction by 2017. c. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

7. Recent Developments, cont. 2. President Obama s 2016 fiscal proposals** Restore estate tax to 2009 exemptions:$3.5 million Modify GRAT rules Modify IRC Section 6166 rules Certain Estate Tax Deferrals Simplify annual gifts *Note also, consistency of basis requirement. IRC 1014 (b) ** http://www.treasury.gov/resource-center/tax- policy/Documents/General-Explanations-FY2016.pdf a. b. c. 1. d. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

8. Recent Developments, cont. 3. a. State Taxation State estate Tax Chart http://media.mcguirewoods.com/publications/State-Death-Tax- Chart.pdf Minnesota estate tax exemption b. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

9. Recent Developments, cont. 4. Treasury Guidance * IRS Priority Guidance Plan a. b. 12 projects under heading Gifts and Estates and Trusts . 3 of those: QTIP Elections and Portability Defined value formula clauses Valuation Discounts New IRS Form 8971 a. b. c. c. * http://www.irs.gov/pub/irs-utl/2015-2016_pgp_initial.pdf 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

10. Recent Developments, cont. 5. Review of some important cases a. Cavallaro v. Commissioner, T.C. Memo 2014-189 b. Estate of Redstone v. Commissioner, 145 T.C. No. 11 (October 26, 2015) c. Mikel v. Commissioner, T.C. Memo 2015-64 (April 6, 2015) d. Field Attorney Advice 20152201f (Issued March 13, 2015, released May 29, 2015) 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

11. Recent Developments, cont. 5. Continued e. Aaron v. Deloitte Tax LLP, N.Y. Sup. Ct., No 653203- 2015 (Malpractice law suit filed Sept. 24, 2015) f. Woelbing v. Commissioner, T.C. Docket No. 30261- 13(filed Dec. 26, 2013); and Estate of Marion Woelbing v. Commissioner, T.C. Docket No. 30260- 13 (filed Dec. 26, 2013 g. United States v. Stiles, 2014 WL 6775263, 114 A.F.T.R.2d 2014-6809 (W.D. Pa., Dec. 2, 2014) 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

12. Recent Developments, cont. 6. Portability a. Time to file b. Extensions 7. Closing letters 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

13. Recent Developments, cont. 8. Uniform Law Update 9. U.S. Supreme Court in the Age of Obama 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

14. Practice Tips 1. Ascendancy of Income Tax in planning 2. Coping with the global, technological, and changing landscape of advising 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

15. IRS Audit Practice Overview 1. Summons power 2. Attorney Client privilege; other privileges 3. Tax opinions 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

16. Net Investment Income Tax IRC Section 1411 imposes a tax of 3.8% on certain income. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

17. Lightning Round Charitable Board Service Estate Planning for Retirement Benefits - Natalie Choate Institute brochure: http://www.law.miami.edu/heckerling/ 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

18. Questions or Comments? Christopher J. Burns (612) 252-2833 cburns@hensonefron.com 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

19. Promotional materials The announcement of this presentation stated: While we were enjoying mid-day high temperatures of -1 in Minnesota, Christopher Burns was absorbing the content of the 50th Annual Hecklerling Institute on Estate Planning in Orlando, Florida. 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM

20. To make up for the guilt of missing this . . . 2 2 0 S o u t h S i x t h S t r e e t , S u i t e 1 8 0 0 | M i n n e a p o l i s , M N 5 5 4 0 2 - 4 5 0 3 P : ( 6 1 2 ) 3 3 9 - 2 5 0 0 F : ( 6 1 2 ) 3 3 9 - 6 3 6 4 HENSONEFRON.COM