Summary on Estate of Beyer v. Commissioner

Steve Akers recently summarized an estate tax case, Estate of Beyer v. Commissioner. Provided below is a summary of the case: 

This Tax Court case involved a situation in which the parties failed to follow formalities in many respects, perhaps coloring the court’s view of the estate’s position. The court held that the bona fide sale for full consideration exception to Section 2036 did not apply. Various distributions had been made from the partnership to the decedent or for the decedent’s estate after his death (including paying the estate’s estate taxes) when the decedent and his estate were no longer a partner, and the court found that an implied agreement for retained enjoyment under Section 2036 existed. No discount was allowed for the assets in a four-year “restricted management account.”

In addition, the decedent did not properly make the “five-year averaging election” for gifts to Section 529 accounts, and gift taxes and penalties were imposed.