Estate Planning under 1958 Tax Law
BY RALPH H. DOBBINS Partner, Hilo, Hawaii Office
Presented before the Hawaii Estate Planning
Council, Hilo, Hawaii — January 1959
As members of the Estate Planning team, we must always be alert to finding ways of providing the greatest possible income and protection for the family as a whole.
On September 2, 1958, President Eisenhower signed Public Law 85-866 also known as "The Technical Amendments Act of 1958" and "The Small Business Tax Revision Act of 1958." Both of these acts were combined in a single Act. This new legislation has caused more excitement taxwise than anything that has happened since the revision
of the Internal Revenue Code of 1954.
The Technical Amendments Act of 1958 grants a full deduction for losses on the sale, or exchange, or worthlessness, of stock in a small-business investment company operating under the "Small Business
Investment Act of 1958." It also grants full deduction to such companies for losses on convertible debentures, including stock received
on conversion, and a 100 per cent dividend-received deduction.
The Technical Amendments Act of 1958 was given this name because its purpose was to correct unintended benefits and unjust hardships. This new legislation relates to all taxpayers—some parts of it only to corporations, some to trusts and estates, and some only to individuals. It does not lower tax rates but does provide tax cuts for many and possible refunds for others.
Let me say here that it is impossible to mention in the time allowed
to me all the possibilities afforded the Estate Planner. At the request of our President, I would like to confine my remarks to two provisions of the new law of special interest to us and, in concluding, to review certain proposed changes not enacted into law, and therefore
remaining valuable in estate planning. The two sections of the new law I would like to discuss with you are:
• Subchapter S
• Instalment payment of Estate Tax on a closely held business