Taxpayer Wins Court Approval of Defined Value Gift Clause


Taxpayer Wins Court Approval of Defined Value Gift Clause

By James F. McDonough, Jr. on May 4th, 2012

Perhaps no recent taxpayer victory is more important to estate and gift tax planning than the case of Wandry v. Commissioner, T.C. Memo 2012-88. The Court in Wandry held that a taxpayer may use a defined value gift clause (“DVGC”) to make a gift expressed in terms of a dollar figure rather than as a specified number of units of property (e.g., $10,000 of XYZ stock). A DVGC protects a taxpayer against an increase in estate or gift tax as the result of a tax audit.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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