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GRAT and Valuation Planning After CCA 202152018: What Practitioners Need to Know

GRAT AND VALUATION PLANNING AFTER CCA 202152018: WHAT PRACTITIONERS NEED TO KNOW

Cost Free
Presentation Length 1.5 hours

Recorded DateFebruary 25, 2022
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaSpecialized Knowledge
Course LevelBasic
Course Description

Released on December 30, 2021, CCA 202152018 has a critical impact on grantor retained annuity trusts (GRATs). The CCA addresses a common valuation challenge: what consideration should be given to a potential sale in valuing an asset? Often there is a long continuum from no sale, to discussions with potential buyers, to a letter of intent, to a binding contract, etc. Where the business is on this continuum will affect how an appraiser evaluates the possible implications of the potential sale. In the recent CCA, the possible sale had moved too far along the continuum towards an actual sale to have been ignored in the valuation (by use of a stale appraisal). As a result, the IRS extended the reasoning in the infamous Atkinson v. Commissioner, 115 T.C. 26, 32 (2000), aff’d, 309 F.3d 1290 (11th Cir. 2002), and held that the valuation was so wrong that the GRAT annuity was not a qualified annuity interest under Code Section 2702, resulting in a deemed gift of the entire value of the property involved. 

What does this CCA mean to GRAT planning generally? What might this mean to the use of GRATs as valuation spillover receptacles in a defined value mechanism? Might this have implications on other aspects of defined value techniques? What might this CCA mean to valuations generally? Are there new steps and precautions practitioners might choose to take? Might this signal a broader application of the Atkinson principles to GRATs, CRTs, CLTs, and perhaps any valuation generally, even applying those principles to impose valuation penalties? This program will address all of these questions and include a detailed discussion of the CCA, analysis by an expert appraiser of the valuation implications, a discussion of Atkinson, and much more.

Learning Objectives:


  • Summarize the implications of the recent IRS pronouncement to estate planning generally

  • Determine how to better and more safely implement estate plans when a client has a business, real estate, or other assets that may be sold

  • Recognize the implications of using GRATs in estate planning and also in defined value mechanisms

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Martin Shenkman

Shenkman Law
Dual Practitioner, Financial Planner
shenkman@shenkmanlaw.com
(201) 845-8400

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Martin M. Shenkman, CPA, MBA, PFS, AEP (distinguished), JD, is an attorney in private practice in Fort Lee, New Jersey, and New York City, New York, with Shenkman Law. His practice focuses on estate and tax planning as well as planning for closely-held businesses and estate administration. Throughout his career, Mr. Shenkman received awards and acknowledgments from the New Jersey Bar Association, Worth Magazine, CPA Magazine, the American Cancer Society, and the AICPA. Mr. Shenkman holds a Bachelor of Science from the Wharton School at the University of Pennsylvania, an MBA from the University of Michigan, a law degree from Fordham University School of Law. He is admitted to the bar in New York, New Jersey, and Washington D.C.

About Our Presenter

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Shenkman Law is a boutique firm focused on the legal needs of high-net-worth individuals, professionals, close business owners, and real estate owners and developers. They provide creative legal solutions to help clients meet complex or seemingly contradictory personal, business, financial, and tax goals, and pride themselves on treating clients with thoughtful care—just like members of our own families.