Transfer Tax Avoidance: The Impact of Perpetuities Restrictions Before and after Generation Skipping Taxation

50 Pages Posted: 7 Dec 2009  

Ira Mark Bloom

Albany Law School

Date Written: 1981

Abstract

This Article explores the impact of perpetuities restrictions prior to and after the enactment of the generation-skipping transfer tax system (“GST”). First, the Article explains how perpetual tax avoidance via Wisconsin-based trusts was possible before the enactment of generation-skipping taxation. The author gives Particular focus to the use of special powers of appointment as a means of achieving perpetual tax avoidance. Then, based on conflict of laws rules, the Article shows how citizens of any state could have selected the laws of Wisconsin to govern the validity of property dispositions. The Article goes on to demonstrate the impact of generation-skipping taxation on tax avoidance devices and shows how the generation-skipping prevents perpetual tax avoidance but prolonged avoidance via trusts is still possible. The Article concludes with recommendations for corrective action by Congress, including a proposal to eliminate prolonged tax avoidance.

Keywords: transfer tax, tax avoidance, perpetual tax avoidance, tax avoidance devices, prolonged tax avoidance, perpetuities restrictions, generation-skipping transfer tax system, GST, special powers of appointment, eliminate tax avoidance

Suggested Citation

Bloom, Ira Mark, Transfer Tax Avoidance: The Impact of Perpetuities Restrictions Before and after Generation Skipping Taxation (1981). Albany Law Review, Vol. 45, No. 2, pp. 260-310, 1981. Available at SSRN: https://ssrn.com/abstract=1517220

Ira Mark Bloom (Contact Author)

Albany Law School ( email )

80 New Scotland Avenue
Albany, NY 12208
United States

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