Ninth Circuit delivers welcome ruling on charitable freezes

Description

Abstract: Now is an appealing time to make large gifts, but IRS challenges to the valuation of transferred assets could result in unexpected gift taxes. However, the Ninth U.S. Circuit Court of Appeals recently favored a taxpayer who’d implemented a gifting strategy to avoid additional taxes from an IRS revaluation: the charitable freeze. This article discusses this strategy and why the court decided that the IRS erred in blocking a gift tax deduction. A sidebar talks about how the court expressly invited the U.S. Treasury Department to amend its regulations if it’s troubled by the consequences of the court’s decision.