Tax Treatment of Blended Families – Change Needed

Wendy C. Gerzog (Professor of Law, University of Baltimore School of Law) has recently posted on SSRN her article entitled Families for Tax Purposes: What About the Steps?

Here is an abstract of her article:

At least 4.4 million families in the U.S. are blended ones that include step-children and step-parents. For tax purposes, these steps receive preferential treatment for their status because they are on the one hand included as family members for many income tax benefit sections, but on the other hand excluded as family members for business entity attribution purposes and for gift and estate tax anti-abuse provisions. In the interests of fairness and uniformity, steps should be treated as family members for all tax purposes where steps have in fact voluntarily acted as their biological or adoptive counterparts, both when such treatment would decrease and increase their tax burdens.