The 7520 rate for October 2013 is increasing to 2.4%.
The October interest rates are as follows:
The IRS this week released inflation-adjusted numbers for 2014 for several transfer tax items. These include the following:
Originally posted on benefitsbryancave.com
In Revenue Ruling 2013-17, the Internal Revenue Service provided clear guidance to define “spouse” for all purposes under the Internal Revenue Code. A “spouse” includes a same-sex spouse whose marriage is recognized by the state in which the marriage occurred. Use of this “state of celebration” rule will greatly simplify employee benefit plan administration for employers. However, the IRS indicated in this guidance that it will provide more direction on the impact of this definition on employee benefit plans.
How Did the IRS Define the State of Celebration Rule?
These are the bottom line holdings from the IRS guidance, which apply for all purposes under the Internal Revenue Code:
Are Domestic Partnerships, Civil Unions or Similar Arrangements Considered Marriage?
No. For purposes of Federal tax laws, the IRS guidance is clear that these types of relationships are not considered marriage. Marriage for Federal tax law purposes does not include a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state, and the term “marriage” does not include such formal relationships.
What Does This Mean for Employee Benefit Plans?
The IRS indicated that it will issue additional guidance to address this issue. However, in the meantime, employers should begin to address the impact of this guidance on the taxation of benefits and the administration of spousal benefits under their plans. Here’s a brief issue list:
Open enrollment would be a great time to start educating employees on these issues and adjusting employer payroll and benefit administration systems. If that opportunity is passed, communication with employees on these issues may have to occur when new summary plan descriptions or summaries of material modifications are issued. Stay tuned for more information on this fast-developing area.
With research and drafting assistance from Washington University School of Law student, Kelsey DeLong.
In Estate of Lambur, the Missouri Court of Appeals addressed the issue of whether an attorney-in-fact is permitted to gift the principal’s property to herself when the gift is not expressly authorized in the power of attorney.
In 2005, Verna Irene Lambur (“Irene”) executed a durable power of attorney naming her nephew’s wife, Anna Stidham (“Anna”), and Jackie Johnson (“Jackie”) as her attorneys-in-fact. The power of attorney granted Irene’s attorneys-in-fact the following power:
“To establish, change or revoke survivorship rights in property or accounts, beneficiary designations for life insurance, IRA and other contracts and plans, and registrations in beneficiary form; to establish ownership of property or accounts in my name with others in joint tenancy with rights of survivorship and to exercise any right I have in joint property; to exercise or decline to exercise any power given to me to appoint property [sic]; to disclaim or renounce transfers to me of property; to make inter vivos gifts of my property to my lineal descendants, including my attorneys in fact, in amounts that are equal by line or class and in an amount for any person that does not exceed in any year the annual gift tax exclusion[.]”
Shortly after the execution of the power of attorney, Anna and Jackie transferred assets that Irene owned, individually, into two new accounts, each titled in the names of Irene, Jackie, and Anna, with rights of survivorship. Upon Irene’s death in May, 2005, the combined value the two accounts was $129,134.46. (more…)