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May 20, 2024

Tax Court rules termination of marital trust with QTIP not subject to gift tax

The U.S. Tax Court today, in Estate of Sally J. Anenberg v. Commissioner, 162 T.C. 9, found that termination of a marital trust containing Qualified Terminal Interest Property (QTIP) was not the disposition of a qualifying income interest for life in QTIP property subject to gift tax under IRC Section 2501. The court further held that the subsequent sale of the trust property in exchange for promissory notes was not subject to gift tax as the termination of the marital trusts terminated the taxpayer's income interest for life in QTIP and IRC Section 2519 did not apply to the sale. A Tax Alert is forthcoming.

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Published by NTD’s Tax Technical Knowledge Services group; Chris DeZinno, legal editor