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This is the second in a two-part article examining developments in estate, gift, and generation-skipping transfer tax and trust income tax between June 2013 and May 2014. This article covers trust developments, the taxation of trusts under the new 3.8% net investment income tax, President Barack Obama's estate and gift tax proposals, and inflation adjustments for 2014.
In response to a comment that the current effective date of the new rules on fiduciary fees does not give fiduciaries enough time to implement them, the IRS amended T.D. 9664 to delay the date.
Sec. 67(e) reached the end of a long and tortured journey recently, when the IRS issued final regulations defining, once and for all, which expenses of an estate or trust are classified as miscellaneous itemized deductions subject to the 2% floor and the alternative minimum tax.
A new tax planning idea that the authors of this item call a Business Asset Protection Trust (BAPT) creates a variety of income tax planning opportunities touching on international transfer pricing, S corporation trust eligibility rules, Sec. 355 split-offs, and captive insurance companies. It also creates user-friendly internal swaps that do not need to meet the draconian requirements of Sec. 1031.
This item looks at a trust-planning strategy that has received greater attention recently—an arrangement that can allow trust income to avoid state income taxes.
The implementation of the Uniform Principal and Income Act of 1997 (UPAIA) and the 2004 revisions to the regulations under Sec. 643 have provided fiduciaries with some flexibility in making distributions of capital gains to beneficiaries.
The new rules governing which costs of trusts and estates are subject to the 2% floor on miscellaneous deductions now apply to tax years beginning after Dec. 31, 2014, rather than to tax years beginning on or after May 9, 2014.
The IRS issued final regulations on the controversial question of which costs incurred by trusts and estates are subject to the 2% floor on miscellaneous deductions under Sec. 67(a).
The Tax Court held that a trustee's activities in a trade or business of a trust was work performed by an individual, and, therefore, it was possible for a trust to qualify for the Sec. 469(c)(7) exception to the treatment of rental real estate activities as per se passive activities.
The IRS issued final regulations on the controversial question of which costs incurred by trust and estates are subject to the 2% floor on miscellaneous deductions under Sec. 67(a).
This item discusses how the net investment income tax under Sec. 1411 applies to charitable remainder trusts and their beneficiaries.
This item details some charitable giving options for owners of closely held businesses, the applicable unrelated business income and self-dealing rules, and best practices for taxpayers who have these charitable desires and restrictions.
Armed with two planning strategies derived from recent cases involving the taxation and administration of trusts, tax advisers can take steps to alleviate the state tax burden on undistributed trust income.
This item addresses the mechanics of decanting and provides guidance on how not to spill or otherwise compromise the trust assets.
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.
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.
The election to treat a qualified revocable trust as an estate under Sec. 645 can result in some complicated accounting and tax consequences as well as some interesting tax planning opportunities because of the separate-share rules.
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.
This article examines developments in estate, gift, and generation-skipping transfer (GST) tax and trust income tax between June 2012 and May 2013.
Sec. 1411(a)(2) imposes a tax of 3.8% on estates and trusts on the lesser of their undistributed net investment income or the excess of their adjusted gross income over the dollar amount at which the highest tax bracket in Sec. 1(e) begins for the tax year.
SPONSORED REPORT
Tax reform changes are now in effect
With all the recent tax law changes, this year it’s more important than ever to make sure your clients’ tax situations are squared away before year end. This report provides necessary guidance to ensure 2019 starts without a hitch.
DEDUCTIONS
Understanding the new Sec. 199A business income deduction
The new deduction allows certain business owners to keep pace with the significant corporate tax cut provided by the Tax Cuts and Jobs Act.