Faculty Publications

This article examines the implications of Loper Bright for IRS regulations.

Rev. Rul. 2023-2 is not a comprehensive solution. While seeking to close down a basis adjustment for assets remaining in the trust at death, it leaves intact the repurchase strategy. To end this strategy, the deemed-ownership principle in Rev. Rul. 85-13 and Example 5 should be eliminated.

This past term, the Supreme Court applied the due process clause to prevent the states from closing down a tax strategy that employs out-of-state trusts. Many had hoped that the case would serve as a vehicle for the Court to overrule taxpayer-friendly precedents that make the strategy possible. But it failed. The question that emerges is whether the decision leaves the states with a path to address the strategy and thereby prevent it from being used to exacerbate issues of inequality. After examining the decision, this paper considers the options available to the states and then suggests a way forward.

The estate tax treatment of publicity rights has played a role in the debate about the state law question whether such rights should be transferable at death. Some point to the estate tax as a reason for making publicity rights non-transferable. For if they are transferable, estate-tax inclusion could result. And, the argument goes, the estate or the beneficiaries could well be coerced into commercializing the rights in order to raise the money to pay the tax. Making them non-transferable would eliminate this possibility. This article considers some of the connections between the federal estate tax and the state law treatment of publicity rights. It concludes with a suggestion about how the tax treatment of publicity rights at a more general level.