Tax Law Update: December 2022Tax Law Update: December 2022
David A. Handler and Alison E. Lothes highlight the most important tax law developments of the past month.
• Treasury publishes 2002-2023 Priority Guidance Plan—The Internal Revenue Service has published its priority guidance plan for next year, highlighting issues that are a priority for the Treasury department. For estate planners, the following topics are of interest:
Retirement plans: Final regulations (final regs) for the changes to retirement plan administration under Internal Revenue Code Section 401(a)(9) and the Setting Every Community Up for Retirement Enhancement Act (known as the “SECURE” Act)
Tax-exempt organizations: Final regs for IRC Section 509(a)(3) supporting organizations and guidance under IRC Section 4941 regarding private foundations’ investments in partnerships with disqualified persons
Relief for late regulatory elections: Guidance under Treasury Regulations Section 301.9100 for relief for late regulatory elections
Income tax basis:
Final regs under IRC Sections 1014(f) and 6035 regarding consistency of basis in the estate and beneficiaries acquiring property from the estate
New: IRC Section 1014 basis adjustments at death of owner of a grantor trust if assets aren’t included in the grantor’s taxable estate
Portability: Guidance on portability regs, published in IRB 2022-30, Revenue Procedure 2022-32
Gift valuation:
Valuation of gifts that are includible in the gross estate when the basic exclusion amount at the time of the gift is greater than at the transferor’s death under the special rule of Treas. Regs. Section 2010-1(c)
Regs under IRC Section 7520 for use of actuarial tables to value annuities, life estates, terms, remainder and reversions
Alternate valuation: Regs on restrictions imposed on estate assets during the alternate valuation period
Deductions: Final regs regarding interest expense and personal guarantees under IRC Section 2053
International issues:
Qualified domestic trust (QDOT): Updates to the QDOT regs
Final regs under IRC Section 2801 on taxes on gifts or bequests from certain expatriates
Generation-skipping transfers (GSTs):
Regs under IRC Section 2632 on late allocation of GST tax exemption on transfers under Section 2642(g)
Defining a GST trust
Ordering rules when the amount of GST tax exemption allocated exceeds the transferor’s available exemption
Final regs for extensions of time to allocate GST tax exemption under Section 2642(g)
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