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Heard at Heckerling 2019 - Day 1

By Mary Delman, JDHoward Klein, CPA, MSTCay Taylor, ESQ. .


The first day of Heckerling serves as the “overture,” giving a taste of what’s ahead in the coming days, and if yesterday is any indication, it is going to be an incredible conference. Glad there are several of us down here listening!

A couple of things that came up:

  • It was interesting to hear presenters Lester B. Law and Howard Zaritsky making the argument in support of Jonathan Blattmachr’s position that an Irrevocable Grantor Trust, while not includible in a decedent’s estate, the assets are given the step-up in basis. The argument has been around for several years, but there is still no case law on it. Now the IRS has said they will be looking at just this fact pattern. It will be great having some guidance!

  • Looks like the IRS is permitting the new additional GST to be allocated to an existing irrevocable trust. There had been doubt, but now it’s time to go back and revisit our clients’ existing trusts to see what this means for them. This could be a great tool for our clients to increase their gifts to grandchildren without using additional lifetime exemption!

  • Trusts with substantially the same grantor and primary beneficiary, must have a non-tax avoidance reason for the creation and/or funding, or the IRS will be collapse them as a single entity for the purpose of the SALT limitations.

  • The Tax Court holds that a ranch is not a hobby, but the passive loss limits still apply. (Robison v. Commissioner, T.C. Memo. 2018-88 (June 19, 2018)).

  • The IRS will, for a limited time, continue to permit late filing of an estate tax return to claim portability, but only if the estate was not otherwise required to file an estate tax return. This position has been extended several times, but is definitely not something we should count on indefinitely. File those returns on time!

  • An important case for our cannabis clients: The Court of Appeals affirmed a Tax Court decision, which rejected a claim by a California dispensary that disallowing business expense deductions for a marijuana business is unconstitutional.

We will be speaking upon our return about all of the fascinating information we picked up down here but in the meantime, please check back to learn what else we’ve heard around Heckerling!

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