Trusts

The Mechanics of Decanting

This item addresses the mechanics of decanting and provides guidance on how not to spill or otherwise compromise the trust assets.

Trust Materially Participated in Real Estate Business

The Tax Court held that a trust materially participated in its rental real estate business and therefore could deduct the losses it incurred in conducting those activities as losses from nonpassive activities.

Computing the Charitable Tax Deduction for a Charitable Remainder Trust

The methods for calculating a charitable remainder annnuity trust and a charitable remainder unitrust are different because the CRUT income stream fluctuates with changes in the value of the trust property. The technicalities involved in determining the value of the income stream or the remainder interest are much more complex for a CRUT.

Alternatives to Form 1041 for Grantor Trusts

For most grantor trusts, filing Form 1041 is optional. Described in this item are alternative methods of reporting and the situations when an alternative reporting method is available.

Computing the Includible Portion for Graduated GRATs

Recent regulations provide practitioners a reminder that planning discussions with clients considering graduated GRATs should include a review of the potential consequences presented if the grantor dies prematurely

Trust Deductions: Knight, Prop. Regs. Still Govern

Preparers of fiduciary tax returns for tax years 2011 and 2012 will not be required to unbundle fiduciary fees, but they still must treat payments readily identifiable as subject to the 2% floor separately from a bundled fiduciary fee.

Estate Tax Treatment of Grantor Retained Interests Clarified

The IRS issued final regulations providing guidance on the portion of property (held in trust or otherwise) includible in the grantor’s gross estate if the grantor has retained the use of the property or the right to an annuity, unitrust, graduated retained interest, or other payment from the property for life, for any period not ascertainable without reference to the grantor’s death, or for a period that does not in fact end before the grantor’s death.

Newsletter Articles

SPONSORED REPORT

How the Election May Affect Taxation of Business Income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

PRACTICE MANAGEMENT

CPAs Contend With Tax ID Theft

Tax-related identity theft fraud remains a widespread problem that is often difficult for victims and their tax preparers to correct.