Tax Court In Brief | Estate Of Kalikow v. Comm'r | Estate Tax Taxation And Deductions And QTIP Trust

• Jurisdiction: United States,Federal
• Law Firm: Freeman Law
• Subject Matter: Tax, Income Tax, Property Taxes
• Author: Freeman Law
• Published date: 17 March 2023

The Tax Court in Brief - March 6th - March 10th, 2023

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

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Tax Litigation: The Week of March 6th, 2022, through March 10th, 2023

• Estate of Spizzirri v. Comm'r, T.C Memo 2023-25 | February 28, 2023 | Urda, J. | Dkt. No 19124-19
• Dawveed v. Comm'r, T.C. Memo. 2023-28| March 6, 2023 |Lauber, J. | Dkt. No. 19385-21L

Estate of Kalikow v. Comm'r, T.C. Memo. 2023-21 | February 27, 2023 | Thornton, J. | Dkt. No. 14436-10.

Summary: Pearl B. Kalikow's ("Pearl") husband died in 1990. On January 4, 2006, Pearl passed away. The SK Trust ("Trust") was created with the remainder of Pearl's husband's estate. On Pearl's husband will it was instructed to the trustees of the Trust to pay the trust's net income to Pearl during her lifetime. After Pearl passed away the Trust assets were paid over to trusts for the benefit of her children Edward Kalikow ("E. Kalikow") and Lauren Platt ("Platt").

Mr. Shalik and Mr. DeVita executors of Pearl's husband's estate, elected to treat the Trust as a QTIP trust under ' 2056(b)(7). The Trust property was included in Pearl's gross estate at its fair market value as of the date of her death. E. Kalikow and Platt created a Kalikow Family Partnership, L.P. ("KFLP"). The Trust transferred the property to KFLP in exchange of 98.5% partnership interest. The Trust property consisted of the 98.5% partnership interest, cash, and marketable securities. The trustees of the Trust were E. Kalikow, Mr. Shalik and Patt. After the payment of certain expenses, the remainder of Pearl's estate was bequeathed to a charitable organization.

From a dispute between Mr. Shalik and E. Kalikow and Patt over the Trust distribution, it was agreed that the Trust would pay a settlement payment for undistributed income (2002-2005), including certain commissions, accounting fees, and legal fees. The IRS issued a Notice of Deficiency determining the value of the Trust limited partnership interest is lower than the amount reported on Form 706. The IRS reduced the Schedule F assets by the value of the estate's pending claim against the Trust. E. Kalikow and Patt on the Cross-Motion for Partial Summary Judgment established that the value of the Trust assets included in the estate were properly reduced...