IRS issues proposed new charitable remainder trust regulations
Article Abstract:
The IRS has issued proposed regulations under IRC sections 664 and 2702 that will influence the tax treatment of charitable remainder trusts holding deferred annuities or interests in partnership held by a party related to the trust. The regulations allow for flip unitrusts, which involve converting a net income trust into a standard pay trust under certain circumstances. While the flip unitrust option would be welcomed by estate planners, the fact that the IRS has suspended rulings on the types of trusts covered by the regulations may create adversity for planners and taxpayers.
Publication Name: Journal of the American Society of CLU & ChFC
Subject: Law
ISSN: 1052-2875
Year: 1997
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Final QPRT regulations released by Treasury, followed by budget proposal to terminate technique
Article Abstract:
IRS final regulations effective on May 17, 1996 regarding personal residence trusts provide qualification rules which if complied with will allow reduction of gift value by the amount of the grantor-retained interest. Qualified personal residence trusts (QPRTs) allow a grantor to reside in a residence before trust termination passes a fee interest to beneficiaries. The rules prohibit sale by the grantor except under specified conditions. President Clinton's Feb 2, 1998 budget proposals include a limitation of QPRTs to pre-enactment trust transfers.
Publication Name: Journal of the American Society of CLU & ChFC
Subject: Law
ISSN: 1052-2875
Year: 1998
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Ruling approves of "Spigot Trust." (IRS ruling)
Article Abstract:
The IRS has provided favorable guidance regarding the use of deferred annuity contracts by Spigot Trusts in a Jan 1998 technical advise memorandum. Such charitable remainder unitrusts are useful investment vehicles for regulating trust income. Allowable use of similar trusts to that in the memorandum is questionable. Those planning such use should note that the IRS placed emphasis on the existence of an independent trustee.
Publication Name: Journal of the American Society of CLU & ChFC
Subject: Law
ISSN: 1052-2875
Year: 1998
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