Tax court supports aggressive use of deferred private annuities in estate planning

02/17/2013 | Financial Planning

The U.S. Tax Court recently ruled against the Internal Revenue Service in Estate of Kite v. Commissioner. The decision paves the way for taxpayers and financial advisers to use private annuities, especially deferred private annuities, more aggressively in the future. The IRS protested the use of a deferred private annuity between family members for estate-planning purposes, arguing that the transfer was a disguised gift; that the death of the taxpayer, Virginia Kite, had been expected; and that the transaction was illusory. The court struck down those arguments.

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