internal_revenue_service department of the treasury number release date index numbers washington dc person to contact telephone number refer reply to cc psi b09-plr-164974-02 date date re legend taxpayer date foundation trust trust trust x accounting firm year dear this is in response to your letter dated date on behalf of taxpayer requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to make allocations of generation-skipping_transfer gst_exemption the facts and representations submitted are summarized as follows on date taxpayer established an irrevocable deed_of_trust for the benefit of her children and more remote descendants plr-164974-02 part i of the trust provides that the trustee shall divide the principal into equal shares so that there will be one share for each child of taxpayer living on date and shall keep each such share invested as a separate trust part i a of the trust provides that during each child’s lifetime and thereafter until the termination of his or her trust the trustee shall distribute as much of the net_income and principal as the trustee in his sole discretion deems desirable to one or more of a child and his or her descendants in such amounts or proportions as the trustee deems appropriate and any net_income not so distributed shall be accumulated and added to the principal of his or her trust part i b of the trust provides that each child’s trust shall terminate immediately prior to the expiration of twenty-one years after the death of the last survivor of taxpayer’s descendants who are living on date and thereupon the then-remaining principal of his or her trust shall be paid to his or her then living descendants per stirpes or in default of such descendants to taxpayer’s then living descendants per stirpes or in default of such descendants to the foundation part i c of the trust provides that notwithstanding the foregoing provisions on a child’s death the then remaining principal of his or her trust shall be paid to or in trust for one or more of his or her descendants on such terms as he or she may appoint by a will pursuant to part i of the trust three separate trusts trust trust and trust were established one for the benefit of each of taxpayer’s three children and their descendants on date taxpayer transferred dollar_figurex to each of trust trust and trust taxpayer relied on accounting firm to prepare her year gift_tax_return taxpayer’s year gift_tax_return was timely filed however accounting firm inadvertently failed to allocate taxpayer’s gst_exemption to the trusts no additional transfers have been made to and no distributions have been made from trust trust or trust taxpayer has requested an extension of time under sec_2642 and sec_301 and to make allocations of taxpayer’s gst_exemption to trust trust and trust for the transfers made in year sec_2601 imposes a tax on every generation-skipping_transfer gst a gst is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2631 provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure adjusted for inflation under sec_2631 that may be allocated by such individual or his executor to any property with respect to which such individual is the transferor plr-164974-02 sec_2632 provides that any allocation by an individual of his or her gst_exemption under sec_2631 may be made at any time on or before the date prescribed for filing the estate_tax_return for such individual’s estate determined with regard to extensions regardless of whether such a return is required to be filed sec_2642 provides that except as provided in sec_2642 if the allocation of the gst_exemption to any transfers of property is made on a gift_tax_return filed on or before the date prescribed by sec_6075 for such transfer or is deemed to be made under sec_2632 or c the value of such property for purposes of sec_2642 shall be its value as finally determined for purposes of chapter within the meaning of sec_2001 or in the case of an allocation deemed to have been made at the close of an estate_tax_inclusion_period its value at the time of the close of the estate_tax_inclusion_period and such allocation shall be effective on and after the date of such transfer or in the case of an allocation deemed to have been made at the close of an estate_tax_inclusion_period on and after the close of such estate_tax_inclusion_period sec_2642 provides generally that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 or and an election under sec_2632 or c such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of sec_2642 which was enacted into law on date sec_2642 provides that in determining whether to grant relief under this paragraph the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief under this paragraph the time for making the allocation or election shall be treated as if not expressly prescribed by statute notice_2001_50 2001_34_irb_189 provides that under sec_2642 the time for allocating the gst_exemption to lifetime transfers and transfers at death the time for electing out of the automatic allocation rules and the time for electing to treat any trust as a generation-skipping_trust are to be treated as if not expressly prescribed by statute the notice further provides that taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i plr-164974-02 sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute under sec_301_9100-1 a regulatory election includes an election whose due_date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore taxpayer is granted an extension of time of days from the date of this letter to make allocations of taxpayer’s available gst_exemption with respect to taxpayer’s transfers to trust trust and trust in year the allocations will be effective as of the dates of the transfers to the trusts the amount of gst_exemption to be allocated to trust trust and trust will be based on the amount of money transferred to the respective trusts as of the date of the transfers the allocations should be made on supplemental form sec_709 united_states gift and generation-skipping_transfer_tax return and filed with the internal_revenue_service center cincinnati oh a copy of this letter should be attached to the supplemental form sec_709 a copy is enclosed for this purpose the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as specifically ruled herein we express or imply no opinion on the federal tax consequences of the transaction under the cited provisions or under any other provisions of the code in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to taxpayer plr-164974-02 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely heather c maloy heather c maloy associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes copy of this letter


t c summary opinion united_states tax_court marvin j lewis and brenda j lewis petitioners v commissioner of internal revenue respondent docket no 1321-00s filed date marvin j lewis and brenda j lewis pro sese frank n panza and sherri wilder for respondent pajak special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time the petition was filed the decision to be entered is should not subsequent effect for not reviewable by any other court and this opinion be cited as authority unless otherwise indicated section references are to the internal_revenue_code in the year in issue respondent determined a deficiency of dollar_figure and an addition_to_tax under sec_665l a of dollar_figure for the taxable_year some of the facts in this case have been stipulated and are so found petitioners resided in fontana california at the time they filed their petition on the federal_income_tax return filed date petitioner marvin j lewis petitioner listed his occupation as ins agency sic petitioner is in the insurance_business and sells life_insurance retirement group benefits voluntary benefits and automobile and homeowner’s insurance petitioner then lived in moreno valley riverside county and drove to los angeles and surrounding areas three to four times per week during he traveled about months at one time petitioner had a log of his travels but lost it moving from one office to another on their return petitioners deducted dollar_figure for car and truck expenses on petitioners’ schedule c profit or loss from business petitioner claimed that he drove big_number miles for business on the same schedule c petitioners deducted dollar_figure for rent expense for business property on a form_4797 sales of business property petitioners reported dollar_figure as the gross_sales price of a house pincite mullen avenue los angeles california mullen avenue claimed a net_loss of dollar_figure reported a basis of dollar_figure and respondent disallowed dollar_figure of the automobile expense disallowed dollar_figure of the rent expense petitioners had a capital_gain mullen avenue property deductions are strictly a inc v indopco commissioner colonial ice co v helvering taxpayers must substantiate claimed deductions commissioner 65_tc_87 5th cir sec_7491 a and determined that of dollar_figure on the sale of the matter of legislative grace 503_us_79 292_us_435 hradesky v affd per curiam f 2d does not change the burden_of_proof where taxpayers have failed to substantiate their deductions 116_tc_438 moreover amounts of the deductions menequzzo v taxpayers must keep sufficient records to establish the commissioner 43_tc_824 sec except as otherwise provided by sec_274 shows that a taxpayer incurred a deductible expense 6001-l1 a income_tax regs generally when evidence but the exact amount cannot be determined the court may approximate the amount inexactitude is of his own making f 2d 2d cir bearing heavily if it chooses against the taxpayer whose cohan v commissioner the court however must have some basis upon which an estimate can be made 85_tc_731 sec_274 imposes stringent substantiation requirements for the deduction of travel and automobile expenses taxpayers must substantiate by adequate_records certain items in order to claim deductions such as the amount and place of each separate expenditure the property’s business and total usage the date of the expenditure or use and the business_purpose for an expenditure or use sec_274 sec_1_274-5t temporary income_tax regs fed reg date to substantiate a deduction by means of adequate_records a taxpayer must maintain an account book diary log statement of expense trip sheets and or other documentary_evidence which in combination are sufficient to establish each element of expenditure or use sec_1_274-5t temporary income_tax regs fed reg date travel and car and truck expenses cannot be estimated under cohan 50_tc_823 affd per curiam 412_f2d_201 2d cir respondent allowed petitioner dollar_figure for automobile expenses based on his comments to the auditing agent which were similar to those he made in court petitioner did not have a log or any other documentary_evidence which meet the strict requirements of sec_274 petitioner’s statement that he lost the log moving from office to office fails to show that this was a loss beyond his control as contemplated by sec_1_274-5 income_tax regs silver v commissioner tcmemo_1972_102 nor has petitioner reasonably reconstructed his expenditures under the regulations 65_tc_342 accordingly we must sustain respondent’s determination on this issue as to the rent deduction issue respondent allowed dollar_figure and disallowed dollar_figure of the amount claimed as a deduction when we reached this issue at trial we asked petitioner whether he could provide any evidence to establish that he was entitled to an additional_amount over and above what respondent allowed the response by petitioner was no i have nothing else to submit we deem this issue conceded by petitioners and sustain respondent’s determination as to rental expenses with respect to determinations of gain_or_loss sec_1001 provides that the gain from the sale_or_other_disposition of property shall be the excess of the amount_realized therefrom over the adjusted_basis provided in sec_1011 for determining gain and the loss shall be the excess of the adjusted_basis provided in such section for determining loss over the amount_realized sec_1011 and sec_1012 provide insofar as relevant in this case that the adjusted_basis of the property shall be its cost sec_1016 provides that proper adjustments shall be made to the basis_of_property for items such as capital expenditures and depreciation allowed_or_allowable sec_1245 relates to gains from disposition of certain properties and provides for a depreciation adjustment respondent in the notice_of_deficiency determined that petitioners had a capital_gain of dollar_figure resulting in an adjustment of dollar_figure dollar_figure dollar_figure reported loss from the sale of an asset as shown in the accompanying computation no such computation was attached to the notice_of_deficiency in the record the parties stipulated that petitioner advised the revenue_agent that the price of the mullen avenue property was dollar_figure and that in calculating the gain upon which the additional tax was based respondent used a sales_price of dollar_figure with dollar_figure of capital expenditures made and depreciation incurred during the years through of dollar_figure petitioners do not agree with respondent’s determination respondent in the trial memorandum explained that respondent had calculated petitioners’ basis in the property at the time of its sale in to be dollar_figure the property’s original purchase_price according to petitioner was dollar_figure respondent added to that amount dollar_figure representing assumed capital expenditures of dollar_figure per year for the years petitioners owned the property the dollar_figure plus dollar_figure totaled dollar_figure respondent then reduced the dollar_figure by depreciation allowed_or_allowable of dollar_figure resulting in a basis of dollar_figure respondent subtracted the dollar_figure basis from dollar_figure the amount petitioners reported as the sales_price of the property on their federal_income_tax return this resulted in the gain of dollar_figure and an adjustment of dollar_figure reported loss for a total adjustment of dollar_figure a schedule e supplemental income and loss from petitioners’ return showed depreciation for that year was dollar_figure an internal_revenue_service transcript of petitioners’ federal_income_tax return shows petitioners claimed dollar_figure of depreciation for that year respondent averaged these two figures dollar_figure and multiplied the result by the years of rental to approximate the depreciation allowed_or_allowable dollar_figure rounded by dollar_figure equals dollar_figure the amount respondent calculated was depreciation allowed petitioners purchased the house at mullen avenue as a personal_residence in date for dollar_figure petitioners sold the house for dollar_figure in date on the form_4797 sales of business property petitioners reported a basis of dollar_figure and a loss of dollar_figure petitioners did not attach a calculation of their basis to the form_4797 petitioners did not have a schedule of the depreciation allowed_or_allowable to them over the rental period they did not even have copies of their income_tax returns showing depreciation petitioners did not have proof of purchase of the mullen avenue property nor of any subsequent capital improvements petitioners had a schedule prepared by their tax_return_preparer which showed purported capital improvements of dollar_figure the listed items on that schedule totaled dollar_figure and the return preparer apparently doubled that amount to dollar_figure petitioner admitted the error at trial the schedule is also suspect because it contains items not capital in nature it is further suspect in that most items are rounded to the nearest one hundred dollar amount this schedule does not persuade us to adjust respondent’s generous computation of capital improvements nor have petitioners shown error in the computation of depreciation which respondent had to undertake because of the failure of petitioners to provide records respondent’s determination on the capital_gains issue is sustained except as set forth below respondent did not have petitioners’ escrow closing statement for the sale of the mullen avenue property when respondent made the computation in the notice_of_deficiency this court has stated that it has always been recognized that all expenses of sale enter into the computation that results in the determination of a gain 12_tc_235 affd 180_f2d_140 8th cir the escrow closing statement lists dollar_figure of selling_expenses which are to be deducted from the dollar_figure figure to reach a net_capital_gain of dollar_figure thus the capital_gain adjustment is dollar_figure dollar_figure dollar_figure this can be reflected in the rule computation under sec_7491 respondent has the burden of production in any court_proceeding with respect to the liability of any individual for any penalty or addition_to_tax sec_6651 imposes an addition_to_tax for failure_to_file a return on time the addition equal sec_5 percent for each month that the return is late not to exceed percent the addition_to_tax under sec_6651 is imposed unless the taxpayer establishes that the failure was due to reasonable_cause and not willful neglect reasonable_cause requires a taxpayer to demonstrate that he or she exercised ordinary business care and prudence 469_us_241 willful neglect is defined as a conscious intentional failure or reckless indifference id pincite petitioners’ return was untimely filed on date and bore a signature date of date the return was due on date at trial petitioner admitted the return was filed in petitioner claimed that he had financial difficulties to the point of filing a bankruptcy proceeding petitioner’s unfortunate personal and financial circumstances do -- - not constitute reasonable_cause for failure to timely file a tax_return lerma v commissioner tcmemo_1995_586 petitioner also claimed that he had a drinking problem as an excuse for his failure to timely file a letter from kaiser permanente which verified petitioner’s attendance at a chemical dependency recovery program shows he attended from october through date petitioners’ return was due on date and was filed on date long before such attendance in any event this court has held that an addition_to_tax under sec_6651 is due if a taxpayer’s only explanation is lack of attention to business affairs resulting from excessive drinking myers v commissioner tcmemo_1980_437 see gardner v commissioner tcmemo_1982_542 we find that petitioners did not show reasonable_cause why the return was not timely filed a comparison of both the signature date and the filing_date leads to the conclusion that the late filing was due to willful neglect we conclude that petitioners are liable for an addition_to_tax under sec_665l1 a for failure to timely file their return reviewed and adopted as the report of the small_tax_case division decision will be entered under rule


department of the treasury internal_revenue_service washington d c sep tllaa tax_exempt_and_government_entities_division uics - decedent taxpayer b date date date date date - trust t state u dear a this is in response to the representative on your behalf as supplemented by correspondence dated and in which he on your behalf request a series of letter rulings under sec_671 sec_678 and sec_408 of the internal_revenue_code code the following facts and representations support your ruling_request letter submitted by your authorized decedent whose date of birth was date died on date survived by his spouse taxpayer b taxpayer b’s date of birth was date at the time of his death the decedent had attained his required_beginning_date as that term is defined in sec_401 of the code f urthermore at the time of his death decedent owned an individual_retirement_account the ira from which he had begun taking required minimum distributions mrds the named primary beneficiary of the ira as of the date of the decedent’s death was trust t article xiii of trust t provides that trust t is governed by and valid under the laws of state u page the trust was established by taxpayer b on date section iii a of trust t provides that during taxpayer b’s life she shall have the right to revoke trust t entirely and to reclaim from the trustee all of the trust property remaining after making payment or provision for payment of all expenses connected with the administration of trust t section iii a provides that during taxpayer b’s life she shall have the right from time to time to withdraw from trust t any part or all of the trust property other than the mrd for the year of the decedent’s death the custodian had not distributed any portion of the ira to trust t or any other person on or about date taxpayer b transferred by means of a trustee to trustee transfer the amounts remaining in decedent’s ira into an ira set up and maintained in her name based on the above facts and representations taxpayer b through her authorized representative requests rulings that trust t will be treated as wholly owned by taxpayer b under code sec_671 and that taxpayer b will therefore be considered as the owner of the trust t assets for federal_income_tax purposes the deemed transfer of the decedent’s ira to trust t followed by the transfer of the decedent’s ira into an ira set up and maintained in the name of taxpayer b will be treated as a spousal_rollover eligible for favorable treatment under sec_408 and pursuant to code sec_408 none of the proceeds of decedent’s ira will be includible in the gross_income of taxpayer b for federal_income_tax purposes for either the calendar_year in which the assets were distributed from decedent’s ira or the calendar_year in which they were transferred into contributed to taxpayer b’s ira with respect to your first ruling_request sec_671 of the code provides that where it is specified in subpart e of part i of subchapter_j that the grantor or another person shall be treated as the owner of any portion of a_trust there shall then be included in computing the taxable_income and credits of the grantor or the other person those items of income deductions and credits against tax of the trust which are attributable to that portion of the trust to the extent that such items would be taken into account under chapter in computing taxable_income or credits against the tax of an individual sec_678 of the code provides that a person other than the grantor shall be treated as the owner of any portion of a_trust with respect to which such person has a page power exercisable solely by himself to vest the corpus or the income therefrom in himself revrul_85_13 1985_1_cb_184 concludes that if a grantor is treated as the owner of a_trust the grantor is considered to be the owner of the trust assets for federal_income_tax purposes therefore based solely on the facts and representations submitted we conclude with respect to your first ruling_request that trust t is a grantor_trust treated as wholly owned by taxpayer b under code sec_671 and sec_678 therefore taxpayer b will be treated as the owner of trust t assets for federal_income_tax purposes with respect to your additional ruling requests code sec_408 provides that except as otherwise provided in this subsection any amount_paid or distributed out of an individual_retirement_plan shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 code sec_408 provides that sec_408 does not apply to a rollover_contribution if such contribution satisfies the requirements of sec_408 and d b code sec_408 provides that sec_408 does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the account is maintained if the entire amount received including money and any other_property is paid into an ira other than an endowment_contract for the benefit of such individual not later than the 60th day after the day on which he receives the payment or distribution code sec_408 provides in pertinent part that in the case of an inherited ira sec_408 shall not apply to any amount received by an individual from such account and no amount transferred from such account to another ira shall be excluded from income by reason of such transfer and such inherited account shall not be treated as an ira for purposes of determining whether any other amount is a rollover_contribution code sec_408 provides that an ira shall be treated as inherited if the individual for whose benefit the account is maintained acquired such account by reason of the death of another individual and such individual was not the surviving_spouse of such other individual thus pursuant to code sec_408 a surviving_spouse who acquires ira proceeds from and by reason of the death of her husband may elect to treat those ira proceeds as her own and roll them over into her own ira page code sec_408 provides that the rollover rules of code sec_408 do not apply to any amount required to be distributed pursuant to code sec_408 with respect to your ruling requests final income_tax regulations under code sec_401 and sec_408 were published in the federal_register pincite federal_register date and in the internal_revenue_bulletin pincite lr b date the preamble to the final regulations in relevant part provides that the regulations apply for determining required minimum distributions for calendar years beginning after date the preamble to the final income_tax regulations under sec_401 of the code also provides in relevant part that a surviving_spouse may elect to treat an ira of his her deceased spouse as his her own if the surviving_spouse is the sole beneficiary of the ira with an unlimited right to withdraw from the ira a surviving_spouse may not elect to treat an ira as his her own if a_trust is the beneficiary of the ira even if she is the sole beneficiary of the trust see preamble pincite federal register18992-18993 however under certain circumstances a surviving_spouse may be eligible to roll over a distribution from an ira of a decedent if the spouse actually receives the distribution regardless of whether the spouse is the sole beneficiary of the ira with respect to your second and third ruling requests generally if the proceeds of a decedent’s ira are payable to a_trust and are paid to the trustee of the trust who then pays them to the decedent’s surviving_spouse as beneficiary of the trust said surviving_spouse shall be treated as having received the ira proceeds from the trust and not from the decedent accordingly such surviving_spouse generally shall not be eligible to roll over or have transferred said distributed ira proceeds into her own ira there are exceptions to this general_rule in this case we note that trust t was the named beneficiary of decedent’s ira taxpayer b was the grantor of trust t and in response to your initial ruling_request the service has concluded that taxpayer b is to be treated as the owner of trust t pursuant to code sec_671 and sec_678 furthermore taxpayer b retains the lifetime power_to_revoke trust t and has the power to reclaim trust t property under the circumstances presented in this ruling_request the service will not apply the general_rule but will instead treat amounts distributed from decedent’s ira and eventually placed in an ira set up and maintained in the name of taxpayer b as being received by her ira directly from the decedent’s ira and not from trust t furthermore as noted above taxpayer b was taxpayer a’s surviving_spouse page therefore with respect to your second and third ruling requests we conclude as follows the deemed transfer of the decedent’s ira to trust t followed by the transfer of the decedent’s ira into an ira set up and maintained in the name of taxpayer b will be treated as a spousal rollover’ eligible for favorable treatment under sec_408 and pursuant to code sec_408 none of the proceeds of decedent’s ira will be includible in the gross_income of taxpayer b for federal_income_tax purposes for either the calendar_year in which the assets were distributed from decedent’s ira or the calendar_year in which they were transferred into contributed to taxpayer b’s ira if different please note that our ruling letter does not authorize the rollover of any amounts required to be distributed under code sec_401 and sec_408 this letter_ruling is based on the assumption that decedent’s ira and taxpayer b’s transferee ira referenced herein either met or meet the requirements of code sec_408 at all times relevant thereto the laws of state u it also assumes that trust t is valid under no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office you are receiving the original of this letter_ruling and your representative is receiving a copy of the letter_ruling page if you wish to inquire about this ruling es please conto nee ax sincerely yours fea v so employee_plans anager technical group enclosures deleted copy of this letter notice of intention to disclose notice copy of notification letter form to authorized representative


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi b04-plr-118070-02 date july re legend decedent residuary_trust spouse daughter son grandchild grandchild grandchild grandchild grandchild date date date date date date county court state statute dear this is in response to your date letter and other correspondence requesting a ruling concerning the generation-skipping_transfer gst tax consequences of the legal settlement and termination of the residuary_trust plr-118070-02 you have requested a ruling that the legal settlement and termination of the residuary_trust will not cause the residuary_trust to lose gst tax exempt status under sections b a and b b of the tax_reform_act_of_1986 the facts submitted are as follows decedent died testate on date prior to date decedent’s will provided that upon decedent’s death the residue of decedent’s estate is to be divided equally into two trusts the marital_deduction_trust and the residuary_trust decedent’s surviving_spouse spouse is to receive all income from the marital_deduction_trust in addition spouse is granted a testamentary general power to appoint the corpus of the marital_deduction_trust spouse is also to receive all income from the residuary_trust and such amounts of principal the trustee deems necessary to provide for spouse’s reasonable support and maintenance taking into account her other resources decedent’s will further provided that upon spouse’s death the residuary_trust is to be divided into equal shares for the children of decedent son and daughter the net_income from each of these shares is to be paid to the beneficiary in monthly or other convenient installments upon either child’s death the net_income is to be paid to his or her children in equal shares with the issue of a deceased child taking under the principle of representation upon the death of the last survivor of spouse son and daughter the residuary_trust is to terminate and all remaining assets are to be distributed to the grandchildren of decedent in equal shares per capita with the share of a deceased grandchild who died leaving issue to pass to his or her issue under the principle of representation son died on date and spouse died on date before date currently son’s three children grandchild grandchild and grandchild and daughter are the income beneficiaries of the residuary_trust daughter has two living children grandchild and grandchild daughter has been serving as trustee of the residuary_trust since date it is represented that no additions to the residuary_trust have been made since date on date grandchild filed a petition for accounting in county court against daughter for breach of fiduciary duty conflict of interest and other charges in connection with her role as trustee of the residuary_trust the parties involved entered into a settlement agreement on date conditioned upon receipt of a favorable ruling from the internal_revenue_service the settlement provides for a termination of the trust and a current_distribution of the assets to daughter and grandchildren - the amount distributed to each person will be an amount equal to the actuarial value of each person’s interest determined under sec_7520 of the code and based on the sec_7520 interest rate in effect on the date this ruling is issued contingent interests of any issue of grandchildren are not being taken into account the settlement was plr-118070-02 the result of negotiations between the parties and requires the consent of all the beneficiaries of the residuary_trust the settlement agreement has been submitted to county court for the court’s approval state statute provides that if all beneficiaries of an irrevocable_trust consent they may compel modification or termination of the trust upon petition to the court unless the continuance of the trust is necessary to carry out a material purpose of the trust law and analysis sec_2601 of the internal_revenue_code imposes a tax on every generation- skipping transfer which is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip under section a of the tax_reform_act_of_1986 and sec_26_2601-1 of the generation-skipping_transfer_tax regulations the gst tax is generally applicable to generation-skipping transfers made after date however under section b a and sec_26_2601-1 the tax does not apply to a transfer under a_trust that was irrevocable on date but only to the extent that such transfer is not made out of corpus added to the trust after date or out of income attributable to corpus so added judicial construction settlement agreement or trustee action with respect to a_trust that is exempt from the gst tax under sec_26_2601-1 will not cause the trust to lose its exempt status these rules are only applicable for gst tax purposes the rules do not apply for example in determining whether the transaction results in a gift_for gift_tax purposes or the realization of gain for income_tax purposes under sec_1001 sec_26_2601-1 provides rules for determining when a modification sec_26_2601-1 provides that a modification of the governing instrument of an exempt trust including a trustee distribution settlement or construction that does not satisfy sec_26_2601-1 b or c by judicial reformation or nonjudicial reformation that is valid under applicable state law will not cause an exempt trust to be subject_to the provisions of chapter if the modification does not shift a beneficial_interest in the trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification and the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust a modification of an exempt trust will result in a shift in beneficial_interest to a lower generation beneficiary if the modification can result in either an increase in the amount of a generation-skipping_transfer or the creation of a new generation-skipping_transfer plr-118070-02 sec_2651 provides generally that the generation to which any person other than the transferor belongs shall be determined in accordance with the rules in that section the gst tax would not generally apply to the residuary_trust or distributions from the residuary_trust because the residuary_trust was irrevocable on date and no additions actual or constructive have been made to the residuary_trust since that date the proposed settlement and termination of the residuary_trust will not shift a beneficial_interest in the residuary_trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification and the proposed modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period originally provided for in the trust accordingly based upon the facts submitted and the representations made and pursuant to sec_26_2601-1 we conclude that the settlement agreement will not cause the residuary_trust to lose exempt status for purposes of chapter therefore distributions from the trust in accordance with the settlement agreement will not be subject_to chapter in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter no opinion is expressed regarding the gift_tax consequences of the relinquishment of the unvested contingent_remainder interests of decedent’s great-grandchildren the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination this ruling is directed only to the taxpayer s requesting it sec_6110 provides that it may not be used or cited as precedent sincerely yours george masnik chief branch office of the associate chief_counsel passthroughs and special industries


internal_revenue_service cc psi 1-cor-121837-00 number info release date re ein nov uilc we are responding to your correspondence regarding and its request for late s_corporation relief the taxpayer is precluded from automatic relief under revproc_97_48 however if it meets the eligibility requirements for relief under revproc_98_55 an election may be submitted for consideration by the memphis service_center before date please keep this letter with your client’s tax records and provide a copy of it to the taxpayer we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures form_2553 and instructions revproc_98_55


sune sec_2002 epalet uniform issue list no legend employer a state b group c employees plan x statute d this is in response to a ruling_request dated date as supplemented by additional correspondence dated date from your authorized representative concerning the pick up of certain employee contributions to plan x under sec_414 of the internal_revenue_code the code the following facts and representations have been submitted pursuant to statute d state b created plan x in as a defined benefit pension_plan and retirement_system for the benefit of group c employees plan x meets the qualification requirements of code sec_401 and is a governmental_plan within the meaning of sec_414 of the code participation in plan x is mandatory on the part of group c employees under statute d section employee contributions to plan x are mandatory and all participants are required to contribute a certain percentage of their base annual salary this contribution is made in the form of a deduction from compensation employer a is allowed to reduce the current salary of plan x participants and pay the mandatory employee contribution directly to plan x in lieu of contributions by the individual participants group c employees do not have the option of receiving such contributions directly instead of having them paid to plan x statute d section also allows state b to pick up and pay the mandatory_contributions to plan x pursuant to sec_414 of the code if contributions are picked up statute d provides that they shall be treated as employer contributions for federal_income_tax purposes pursuant to statute d state b proposes that effective the first payroll_period following receipt of a favorable ruling by the internal_revenue_service contributions shall be deducted from the compensation of group c employees before the computation of applicable federal taxes and shall be treated as employer contributions under sec_414 of the code based on the foregoing facts and representations you have requested the following rulings that amounts deducted and withheld from the salary of group c employees pursuant to section of statute d qualify as employee contributions that are picked up by state b under code sec_414 and as such are not included in group c employees’ gross_income for federal_income_tax purposes that amounts deducted and withheld from the salary of group c employees pursuant to section statute d qualify as employee contributions that are picked up by state b under code sec_414 and as such do not constitute wages for federal_income_tax withholding purposes that the picked-up contributions will not be treated as annual_additions for purposes of code sec_415 with respect to ruling_request sec_1 and code sec_414 provides that contributions otherwise designated as employee contributions shall be treated as employer contributions if such contributions are made to a plan described in code sec_401 established by a state government or a political_subdivision thereof or any agency_or_instrumentality of any one of the foregoing and are picked up by the employing unit the federal_income_tax treatment to be accorded contributions that are picked up by the employer within the meaning of code sec_414 is specified in revrul_77_462 1977_2_cb_358 in that revenue_ruling the employer school district agreed to assume and pay the amount employees were required by state law to contribute to a state pension_plan revrul_77_462 concluded that the school district's picked up contributions to the plan are excluded from the employees’ gross_income until such time as they are distributed to the employees the revenue_ruling held further that under the provisions of code sec_3401 the school district's contributions to the plan are excluded from wages for purposes of the collection of income_tax at source on wages therefore no withholding is required from the employees’ salaries with respect to such picked up contributions the issue of whether contributions have been picked up by an employer within the meaning of code sec_414 is addressed in revrul_81_35 1981_1_cb_255 and revrul_81_36 1981_1_cb_255 these revenue rulings established that the following two criteria must be met the employer must specify that the contributions although designated as employee contributions are being paid_by the employer in lieu of contributions by the employee and the employee must not be given the option of choosing to receive the contributed amounts directly instead of having them paid_by the employer to the pension_plan furthermore it is immaterial for purpases of the applicability of code sec_414 whether an employer picks up contributions through a reduction in salary an offset against future salary increases or a combination of both in revrul_87_10 1987_1_cb_136 the internal_revenue_service considered whether contributions designated as employee contributions to a governmental_plan are excludable from the gross_income of the employee the service concluded that to satisfy the criteria set forth in revenue rulings and with respect to particular contributions the required specification of designated employee contributions must be completed before the period to which such contributions relate employer a satisfies the criteria set forth in code sec_414 revrul_81_35 and revrul_81_36 by providing that it will pick up and make contributions to plan x in lieu of contributions by eligible employees and that no employee will have the option of receiving such amount directly in cash instead of having it contributed to plan x accordingly we conclude that amounts picked up by employer a for group c employees shall be treated as employer contributions and will not be includable in group c employees’ gross_income for the taxable_year in which such amounts are contributed because we have determined that the picked up amounts are to be treated as employer contributions they are excepted from wages as defined in code sec_3401 for federal_income_tax withholding purposes therefore no withholding of federal_income_tax is required from employees’ salaries with tespect to such picked up amounts regarding ruling_request sec_415 of the code provides in general that a participant's benefit expressed as an annual_benefit cannot exceed the lesser_of a dollar_figure as adjusted for cost-of jiving increases or b percent of the participant's average compensation_for the high_three_years the percent of compensation limit under sec_415 does not apply to governmental plans sec_415 of the code provides in general that contributions and other annual_additions for a participant may not exceed the lesser_of a dollar_figure as adjusted for cost-of-living increases or b percent of the participant's_compensation sec_1 d of the income_tax regulations provides in part that where a defined_benefit_plan provides for mandatory employee contributions the annual_benefit attributable to such contributions is not taken into account for purposes of determining the maximum limitations under code sec_415 this regulation further provides that the mandatory employee contributions are considered a separate defined_contribution_plan maintained by the employer that is subject_to the limitations on contributions and other additions described in code sec_415 however employee contributions that are picked up by the employer pursuant to code sec_414 are treated as employer contributions and as such are not annual_additions to a separate defined_contribution_plan for purposes of sec_415 accordingly we conclude that the picked up contributions will not be treated as annual_additions for purposes of code sec_415 these rulings are based on the assumption that plan x will be qualified under sec_401 of the code at the time of the proposed contributions and distributions the effective date for the commencement of the proposed pick-up of the mandatory_contributions cannot be earlier than the date of this letter tuling no opinion is expressed as to whether the amounts in question are subject_to tax under the federal_insurance_contributions_act no opinion is expressed as to whether the amounts in question are paid pursuant to a salary reduction agreement’ within the meaning of sec_3121 of the code this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent a copy of this ruling is being sent to your authorized representative pursuant to a power_of_attorney on file in this office should you have any questions pertaining fo this ruling you may contact of this office at ' sincerely yours andrew e zuckerman acting manager employee_plans technical branch


t c memo united_states tax_court phillip moreno petitioner v commissioner of internal revenue respondent docket no filed date phillip moreno pro_se christine v olsen for respondent memorandum opinion laro judge the case is before the court fully stipulated under rule phillip moreno petitioned the court to redetermine respondent's determination of a dollar_figure deficiency in his federal_income_tax we must decide whether petitioner's gross_income includes the gain that he realized in from the sale of his personal_residence we hold it does unless otherwise indicated section references are to the internal_revenue_code in effect for the relevant year rule references are to the tax_court rules_of_practice and procedure dollar amounts have been rounded to the nearest dollar background all of the facts have been stipulated and are so found these facts and the exhibits submitted therewith are incorporated herein by this reference petitioner resided in mission viejo california when he petitioned the court he filed a form_1040 u s individual_income_tax_return using the filing_status of single he reported on that return that his gross_income was dollar_figure and that his taxable_income was zero on date petitioner sold his residence located pincite salisbury avenue goleta california goleta property for dollar_figure he received net_proceeds of dollar_figure at the closing and he realized a dollar_figure gain on the sale he reported his gain on a form_2119 sale of your home this form stated that petitioner had not yet purchased a replacement_property but that petitioner intended to do so within the replacement_period on date petitioner presented his son rueben moreno with a check for dollar_figure twenty-nine days later rueben moreno purchased property located pincite tamarac place mission viejo california tamarac property for dollar_figure rueben moreno paid the purchase_price by presenting a check in the amount of dollar_figure using dollar_figure that he had previously given to an escrow company as an earnest money deposit and financing the balance through long beach bank by way of a deed_of_trust on which he was solely liable rueben moreno was listed on the deed as the sole owner of the tamarac property on date rueben moreno transferred the tamarac property to himself and his wife teresa moreno as joint_tenants four months later rueben and teresa moreno transferred the tamarac property to themselves and petitioner as joint_tenants on date petitioner reconveyed his interest in the tamarac property to rueben and teresa moreno as joint_tenants petitioner and rueben and teresa moreno resided at the tamarac property during all relevant times petitioner did not deduct the mortgage interest_paid on the tamarac property on his or federal_income_tax return rueben moreno did respondent determined that petitioner failed to replace the goleta property within the replacement_period and that accordingly petitioner's gross_income included his dollar_figure gain on the property's sale petitioner petitioned the court on date to redetermine respondent's determination petitioner alleged in his petition that he met the requirements under sec_1034 which would defer his gain petitioner further alleged that rueben moreno's name was used on the documents surrounding the purchase of the tamarac property because petitioner was on disability and unable to secure a mortgage in his own name petitioner further alleged that rueben moreno used petitioner's money as the downpayment on the tamarac property and that he and rueben moreno intended for petitioner to own the tamarac property the court served petitioner on date with a notice setting this case for trial at the trial session beginning on date in san diego california on date petitioner's case was called for trial petitioner failed to appear either in person or by representative respondent's counsel appeared and submitted this case to the court fully stipulated at this time she informed the court that a representative of petitioner had notified her that petitioner wanted to submit his case to the court under rule by order dated date we directed the parties to file with the court on or before date memoranda of points and authorities respondent filed her memorandum of authorities with the court on date petitioner did not filed a memorandum of points and authorities with the court discussion sec_1034 allows an individual to defer the recognition of all or part of any gain realized on the sale of a principal_residence if other_property is purchased and used by the taxpayer as a new principal_residence within the period beginning years before the date of the sale and ending years after that date sec_1034 provides that gain is recognized only to the extent that the individual's adjusted sale price of the old residence exceeds his or her cost of purchasing the new residence petitioner did not replace the goleta property within the 4-year statutory period although petitioner alleges that he did because rueben moreno bought the tamarac property on petitioner's behalf we are not persuaded that such was the case the name of rueben moreno appeared on all of the documents surrounding the closing of the tamarac property rueben moreno was the only person liable on the underlying debt and rueben moreno was the only person listed on the original deed it is also relevant that petitioner declared on his tax_return that he had not yet purchased a property to replace the goleta property and that rueben moreno had purchased the tamarac property before petitioner's return was filed the record does not support petitioner's allegation that he was on disability at the time that rueben moreno purchased the tamarac property in any event the fact remains that it was rueben moreno who made the purchase even if we were to find that rueben moreno purchased the tamarac property for petitioner's benefit which we do not petitioner would still be outside the scope of sec_1034 sec_1034 is strictly construed see eg 65_tc_378 lokan v commissioner tcmemo_1979_380 bazzell v commissioner tcmemo_1967_101 and the key to nonrecognition afforded therein turns on maintaining continuity of title 602_f2d_1341 9th cir allied marine sys inc v commissioner tcmemo_1997_101 see also edmondson v commissioner tcmemo_1996_393 when an individual disposes of his or her residence the new residence must be placed in the taxpayer's name to defer gain under sec_1034 marcello v commissioner 380_f2d_499 5th cir affg on this issue and remanding on other issues tcmemo_1964_299 gain recognized where title to the new residence was placed in the name of the taxpayer's mother snowa v commissioner tcmemo_1995_336 gain recognized where the divorced taxpayer purchased a new residence where the title to the new residence was jointly placed in the names of the taxpayer and her new spouse and the taxpayer's cost of purchasing her interest in the new residence exceeded the adjusted sale price for her interest in the old residence may v commissioner tcmemo_1974_54 gain recognized where title to the new residence was placed in the name of the taxpayer's daughter see also de ocampo v commissioner tcmemo_1997_161 sec_1 b income_tax regs if there is a shift in title from the taxpayer to someone other than the taxpayer nonrecognition under sec_1034 is usually denied marcello v commissioner supra we hold for respondent in so doing we have considered all allegations of petitioner and to the extent not discussed above find them to be irrelevant or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date index number ----------------------------------------------- ----------------------------------- ----------------------------- ----------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------------- id no -------------- ----------------- telephone number ---------------------- refer reply to cc corp b02 plr-106574-15 date date legend parent ------------------------------------------------------------- -------------------------------------------------- subsidiary ------------------------------------------------------------- -------------------------------------- date date ---------------------------- --------------------------- company official ----------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------- dear ---------------- this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election the extension is being requested for parent and subsidiary to elect to file a consolidated federal_income_tax return with parent as the common parent under sec_1_1502-75 of the income_tax regulations hereinafter referred to as the election for the taxable_year ending date the material information submitted for consideration is summarized below parent filed its tax returns prior to the acquisition of subsidiary on a calendar_year basis on date parent acquired all of the stock of subsidiary the parent affiliated_group intended to file a consolidated_income_tax_return with parent as the common parent for the taxable_year ending date the election was plr-106574-15 due on the last day prescribed by law including extensions of time for filing parent’s return but for various reasons parent did not timely file the election subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for the parent affiliated group's taxable_year for which it wants to make the election parent represents that it does not seek to alter a return position for which an accuracy-related_penalty has been or could have been imposed under sec_6662 of the code sec_1_1502-75 provides that a group which did not file a consolidated_return for the immediately preceding_taxable_year may file a consolidated_return in lieu of separate returns for the taxable_year provided that each corporation which has been a member of the group during any part of the taxable_year for which the consolidated_return is to be filed consents in the manner provided in sec_1_1502-75 to the regulations under sec_1502 if a group wishes to exercise its privilege of filing a consolidated_return such consolidated_return must be filed no later than the last day prescribed by law including extensions of time for filing the common parent’s return under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the time for filing the election is fixed by the regulations ie sec_1_1502-75 therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for the parent affiliated_group to file the election provided parent shows it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information an affidavit and representations submitted by parent and company official explain the circumstances that resulted in the failure to timely file a valid election the information establishes that the request for relief was filed before the failure to timely make the election was discovered by the internal_revenue_service see sec_301_9100-3 plr-106574-15 based on the facts and information submitted including the affidavit submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly an extension of time is granted under sec_301_9100-3 until days from the date on this letter for parent to file the election by filing a consolidated_return with parent as the common parent and attaching a form_1122 for subsidiary for the taxable_year ending date parent must attach a copy of this letter to the return alternatively if such return is filed electronically the requirement of attaching a copy of this letter to the return may be satisfied by attaching a statement to the return that provides the date and control number plr-106574-15 of this letter_ruling the above extension of time is conditioned on the parent affiliated group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent affiliated group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent and subsidiary qualify substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the return or the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the return or the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by parent and company official the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely _________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division uil no mar se tep e t4 legend taxpayer a financial_institution a ira x amount a date dear this is in response to your request received date in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code the code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a age represents that on date he received a distribution from ira x totaling amount a taxpayer a asserts that his failure to accomplish a rollover of amount a within the 60-day period prescribed by sec_408 of the code was due to a medical_condition that impaired his ability to stand and walk for extended periods taxpayer a states that this medical_condition was due to an injury to his left foot in late sustained while roofing an outdoor storage shed taxpayer a represents that in late he was aware of recent losses in ira x which triggered his decision to remove amount a from ira x and find another ira with a higher rate of return taxpayer a represents that while it was his intention to weigh the relative merits of other iras and rollover amount a within the 60-day period his page of medical_condition worsened during the 60-day period following date effectively preventing him from doing so amount a currently remains in taxpayer a’s savings account based on these facts and representations you request a ruling that the internal_revenue_service the service waive the 60-day rollover requirement with respect to the distribution of amount a sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if i ii the entire amount received including money and other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 i received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 from an ira which was not includible in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject page of to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 lr b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred you have not presented evidence to the service as to how any of the factors outlined in revproc_2003_16 affected your inability to timely roll over amount a or any portion thereof to an ira you have stated that despite the progressive nature of your medical_condition you were physically able to visit your financial advisor in late deposit the distribution check you received on date in your savings account visit other financial advisors subsequent to the termination of your relationship with your to original financial advisor at financial_institution a and visit a doctor on obtain a diagnosis of and treatment for your medical_condition furthermore you stated that your failure to timely rollover amount a to an ira within the required 60-day period could be attributed to your uncertainty over which financial advisor to trust the state of the stock market in early and other reasons unrelated to your medical_condition finally you declined to respond to a request from the service for additional documentary_evidence supporting your assertion that your medical_condition effectively prevented you from timely rolling over amount a therefore pursuant to sec_408 of the code the service declines to waive the 60-day rollover requirement with respect to the distribution of amount a from ira x no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent page of if you wish to inquire about this ruling please contact between a m and p m at _ se t ep ra t4 please address all correspondence to id weekdays sincerely yours ff a manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose


office_of_chief_counsel department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date cc ita b04 ------------- genin-158097-05 number info release date uil -------------------------------- ---------------------------------------------------------------------------- ----------------------------------------- ------------------------------- dear ---------------- thank you for your letter dated date concerning the payments your agency makes to relocation services companies on behalf of your employees you requested that we review your current policy on the taxability of these payments to employees according to your letter you currently treat these payments as not taxable based on your interpretation of c f_r whether a payment is taxable is determined under the internal_revenue_code and depends on the type of services the relocation company is providing to the employee sec_82 of the internal_revenue_code provides that an amount received directly or indirectly by an individual as payment or reimbursement for expenses of moving attributable to employment are included in gross_income unless it is a qualified_moving_expense_reimbursement see also c f_r sec_132 provides that a qualified_moving_expense_reimbursement is a reimbursement for an expense that would be deductible as a moving expense under sec_217 if directly paid_or_incurred by an individual in other words if a moving expense qualifies as a deduction under sec_217 then a reimbursement for the moving expense is not included in income sec_217 allows as a deduction moving_expenses paid_or_incurred during the taxable_year in connection with the commencement of work by the taxpayer as an employee at a new principal_place_of_work under sec_217 deductible moving_expenses include only the reasonable expenses of moving household goods and personal effects from the former residence to the new residence and traveling from the former residence to the new residence but not including meals therefore a reimbursement for many moving_expenses reimbursable to federal employees under the federal travel regulations is included in the employee’s gross_income taxable reimbursements include reimbursements for costs associated with the purchase of a new home or sale of the old home including home improvement expenses expenses of breaking a lease loss on the sale of a home car registration and driver license fees meals mortgage penalties househunting trips real_estate_taxes security deposits and temporary_living_expenses i have included a copy of internal_revenue_service publication moving_expenses which provides additional guidance on the taxability of moving expense reimbursements i hope you find this information helpful if you have any questions please call ------------- -------- at -------------------- sincerely donna m crisalli special counsel to the associate chief_counsel income_tax accounting enclosure macro form rev department of the treasury - internal_revenue_service


internal_revenue_service number release date index number -------------------------------------------------- ----------------------------------------------------- --------------------------------------- re -------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------------- id no -------------- ----------------- telephone number ---------------------- refer reply to cc psi b04 plr-133067-15 date december legend decedent spouse date date ------------------------------------------------------------------ ------------------------------------ ------------------- ------------------------ dear -------------- this letter responds to your personal representative’s letter of date requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election under sec_2010 of the internal_revenue_code portability election to allow a decedent’s surviving_spouse to take into account that decedent’s deceased spousal unused exclusion dsue amount the facts and representations are as follows decedent died on date survived by spouse date is a date after the effective date of the amendment to sec_2010 which provides for portability of a dsue amount to a surviving_spouse to obtain the benefit of portability of decedent’s dsue amount to spouse decedent’s estate was required to file form_706 united_states estate and generation-skipping_transfer_tax return on or before the date that is nine months after decedent’s date of death or the last day of the period covered by an extension decedent’s form_706 was due on date but the estate did not file a form_706 to make the portability election the estate discovered its failure to elect portability after the due_date for making the election it is represented that the value of decedent’s gross_estate is less than the basic exclusion amount in the year of decedent’s death including any taxable_gifts made during his lifetime plr-133067-15 you request an extension of time pursuant to sec_301_9100-3 to elect portability of decedent’s dsue amount pursuant to sec_2010 law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2010 provides that a credit of the applicable credit_amount shall be allowed to the estate of every decedent against the tax imposed by sec_2001 sec_2010 provides that the applicable credit_amount is the amount of the tentative_tax that would be determined under sec_2001 if the amount with respect to which such tentative_tax is to be computed were equal to the applicable_exclusion_amount on date congress amended sec_2010 effective for estates of decedents dying and gifts made after date to allow portability of a decedent’s unused applicable_exclusion_amount between spouses tax relief unemployment insurance reauthorization and job creation act of pub_l_no sec_303 124_stat_3296 sec_2010 provides that the applicable_exclusion_amount is the sum of the basic exclusion amount and in the case of a surviving_spouse the dsue amount sec_2010 generally provides that the basic exclusion amount is dollar_figure to be adjusted for inflation annually after calendar_year sec_2010 defines the dsue amount to mean the lesser_of a the basic exclusion amount or b the excess of -- i the applicable_exclusion_amount of the last deceased spouse of the surviving_spouse over ii the amount with respect to which the tentative_tax is determined under sec_2001 on the estate of such deceased spouse sec_2010 provides that a dsue amount may not be taken into account by a surviving_spouse under sec_2010 unless the executor of the estate of the deceased spouse files an estate_tax_return on which such amount is computed and makes an election on such return that such amount may be so taken into account the election once made shall be irrevocable no election may be made if such return is filed after the time prescribed by law including extensions for filing such return sec_2010 provides that the secretary shall prescribe regulations as may be necessary or appropriate to implement sec_2010 plr-133067-15 sec_20_2010-2t a of the estate_tax regulations as in effect on date provides that to allow a decedent’s surviving_spouse to take into account that decedent’s dsue amount the executor of the decedent’s estate must elect portability of the dsue amount on a timely-filed form_706 under sec_20_2010-2t a the due_date of an estate_tax_return required to elect portability is nine months after the decedent’s date of death or the last day of the period covered by an extension if an extension of time for filing has been granted under sec_20_2010-2t a the portability election is made by timely filing a complete and properly prepared estate_tax_return unless the executor satisfies the requirements for the election not to apply in sec_20_2010-2t a i sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 provides that the term statutory election means an election whose due_date is prescribed by statute the term regulatory election means an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute a request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election the due_date for the portability election is prescribed by statute in the case of an estate required to file an estate_tax_return under sec_6018 see sec_2010 sec_6075 and sec_6018 in the case of an estate that is not required to file an estate_tax_return under sec_6018 the due_date is prescribed by regulation see sec_20_2010-2t a see also sec_20_2010-2 and revproc_2014_18 2014_7_irb_513 sec_2 accordingly in the latter case a taxpayer may seek an extension of time to elect portability under the provisions of sec_301_9100-3 plr-133067-15 sec_6018 requires the filing of an estate_tax_return in all cases where the gross_estate exceeds the basic exclusion amount in effect under sec_2010 for the calendar_year which includes the date of death for purposes of this determination under sec_6018 the basic exclusion amount is reduced but not below zero by the sum of -- a the amount of the adjusted_taxable_gifts within the meaning of sec_2001 made by the decedent after date plus b the aggregate amount allowed as a specific exemption under sec_2521 as in effect before its repeal by the tax reform act of with respect to gifts made by the decedent after date it is represented that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is not required to file an estate_tax_return under sec_6018 under these facts the commissioner has discretionary authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly we grant an extension of time of days from the date of this letter in which to elect portability under sec_2010 the election should be made by filing a complete and properly-prepared form_706 and a copy of this letter within days from the date of this letter to the cincinnati service_center at the following address internal_revenue_service cincinnati service_center stop cincinnati oh for purposes of electing portability a form_706 filed by decedent’s estate within days from the date of this letter will be considered to be timely filed the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination if it is later determined that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is required to file an estate_tax_return pursuant to sec_6018 the commissioner is without authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability and the grant of the extension referred to in this letter is deemed null and void this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-133067-15 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely associate chief_counsel passthroughs special industries by lorraine e gardner lorraine e gardner senior counsel branch passthroughs special industries enclosures cc