FEDERAL INCOME TAX, 6th Edition, Chapter 6, p. 131, Foundation Press, 2011
29 Pages Posted: 11 Aug 2011 Last revised: 15 Sep 2011
Date Written: August 11, 2011
The contributed material consists of a chapter on gifts and inheritances from the sixth edition of Federal Income Tax (2011). The chapter discusses the oft-quoted Duberstein standard for determining what is a gift and questions the actual usefulness of that standard. The tax treatment of gifts is examined, and the authors suggest a rationale for the exclusion of gifts from the donee’s income. Exceptions to income exclusion are noted. In connection with considering the exclusion of inheritances from income, attention is given to the treatment of the settlement of an estate controversy. The special treatment of a gift or devise to an employee is examined. The manner for determining the basis of gifted and inherited property is explained, and attention is given to the effect that the payment of a gift tax has on a donee’s basis. Illustrations are provided to help the reader see how the tax rules operate.
Keywords: Gift, Inheritance, Duberstein, Donor, Donee, Devise, Gift Tax
JEL Classification: H20, H25
Suggested Citation: Suggested Citation
Kahn, Douglas A. and Kahn, Jeffrey H., Federal Income Tax - Gifts and Inheritances (August 11, 2011). FEDERAL INCOME TAX, 6th Edition, Chapter 6, p. 131, Foundation Press, 2011; U of Michigan Public Law Working Paper No. 246; FSU College of Law, Public Law Research Paper No. 545. Available at SSRN: https://ssrn.com/abstract=1908383