IRS Issues Guidance Adopting “State Of Celebration” Rule for Same-Sex Marriages

Same-Sex MarriagesThe Internal Revenue Service (IRS) has issued guidance clarifying the federal tax implications of the U.S. Supreme Court’s Windsor decision. Windsor held that Section 3 of the Defense of Marriage Act (DOMA), which defined marriage as between one man and one woman, violated the Fifth Amendment of the Constitution. The U.S. Supreme Court limited its holding to “lawful marriages,” the meaning of which was uncertain. In Rev. Rul. 2013-17, the IRS announced that a same-sex couple that was legally married in a domestic or foreign jurisdiction that recognized their marriage (the “state of celebration”) will be treated as married for federal tax purposes, even if such couple currently resides in a state not recognizing same-sex marriages. The state of celebration rule applies for all federal tax purposes, including income, gift and estate taxes. The IRS also clarified that it does not consider registered domestic partnerships, civil unions or other non-marital relationships that may be recognized under state law to be “marriage” for federal tax purposes.

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