Steve Akers, Senior Fiduciary Counsel, Southwest Region, Bessemer Trust, has made available for download his summary of Steinberg v. Commissioner, 145 TC No. 7, which deals with net, net gifts.  The abstract for Mr. Aker’s full report reads as follows:

In Steinberg v. Commissioner, (referred to as “Steinberg II”) the Tax Court approves a “net net gift” arrangement. The donor made gifts in 2007 to her four adult daughters, with the donees agreeing to pay two separate liabilities of the donor (hence, these types of gifts have been referred to as “net, net gifts”): (1) the federal gift tax imposed as a result of the gifts, and (2) any federal or state estate tax liability imposed under § 2035(b) if the donor were to die within three years of making the gifts. Steinberg II allows a reduction in the amount of a net gift for the second of those assumed liabilities—the potential § 2035(b) estate tax liability if the donor dies within three years of making the gift.

This opinion is the Tax Court’s opinion following the trial of the case after the court refused the IRS’s motion for summary judgment in 141 T.C. 258 (2013).

Please click here for the full copy of Mr. Akers’ summary.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.