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1986 gift tax return that the value of the transfer was $456,705.
She claimed a marital deduction of $456,705 for the gift under
section 2523.
The assets in irrevocable trust #1 were transferred to
irrevocable trust #2 after Clifford Gray died on January 5, 1988.
3. Irrevocable Trust #2
The trust agreements provided that the income and principal
of irrevocable trust #2 was to be accumulated during decedent's
lifetime. Decedent's granddaughter and great-grandchildren were
the remainder beneficiaries of irrevocable trust #2.
Irrevocable trust #2 transferred 109 shares of Beth W. Corp.
stock to Beth W. Corp. on March 19, 1988, and 75 shares on July
31, 1989. Irrevocable trust #2 treated those transfers as
redemptions and reported the amounts received in exchange as
dividends on its income tax returns. The redemptions were
recorded on duly executed stock certificates.
4. Irrevocable Trust #3
Decedent created and transferred 1,004 shares of Beth W.
Corp. stock to irrevocable trust #3 on March 19, 1987. The trust
agreement for irrevocable trust #3 required the trustees to
distribute all principal and accumulated income to Pollett when
decedent died. Irrevocable trust #3 did not grant to any
beneficiary a power to demand immediate possession of any part of
the corpus. Decedent reported on her 1987 gift tax return that
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