50 years ago in The Tax Adviser.

• Position: TTA 50 YEARS

Here are some highlights from the July 1970 issue.

Trusts for minors

The Tax Reform Act of 1969 has necessitated a reappraisal of vehicles previously utilized for estate planning purposes. More specifically, where do we now stand with gifts made to minors? The Sec. 2503(c) trust, or "present interest" trust for a minor, is a common type of accumulation trust used to provide a vehicle for the management of an infant's property in order to avoid the use of a legal guardianship But who should be the custodian? Well, obviously, not the grantor!

--Philip E. Heckerling, "Estate Planning: Taxing the Grantor Who Remains TrusteeCustodian for a Minor, "p. 451. Heckerling was a professor of law at the University of Miami Law School and director of the Institute of Estate Planning.

Multiple whammy on stock options

Would you believe that the Tax Reform Act of 1969, when fully effective, can result in a tax of almost 100% on the "compensatory" element in statutory stock options, i.e., the bargain element at the time of exercise? This result can come about from the combination of the minimum tax on tax preferences, the changes in long-term capital gain rates, and the interplay between tax preferences and the maximum tax on earned income. The latter interplay has an echo effect on years surrounding the year in which a tax preference item arises because of the "five-year average tax preferences" rule.

--AlbertH. Cohen, CPA, "Tax Clinic:Multiple Whammy on Stock Options,"p. 453. Cohen was with...