2007-13 for the portion of the grantor trusts
treated as owned by the husband.
A common estate planning technique is for a client to contribute property to a limited partnership, and for the client then to sell the limited partnership interest he or she owns to a grantor trust
(1) in exchange for a promissory note.
Because of these disadvantages of QSSTs and ESBTs, grantor trust
treatment often becomes the preferred way to qualify a trust as an eligible S corporation shareholder.
The grantor, G, puts the policy in one grantor trust
, then transfers the policy to the second grantor trust
in exchange for cash.
Without a new EIN and a new account, though, how can a CPA know what income is allocable to the period before death when the trust was a grantor trust
and what income is allocable to the period after death when the trust is not a grantor trust
persons, the conclusion reached in Letter Ruling 201504004 may reflect IRS acknowledgment of the regulation's inherent ambiguity and indicate IRS thinking as to the types of equity interests, other than interests in grantor trusts
, that may be eligible to be treated as passthrough certificates.
However, as discussed in further detail below, the grantor trust
should be "seeded" with sufficient assets so that the trust is respected by the IRS.
IRC [section] 675(4) provides that a trust is a grantor trust
for income tax purposes if any person holds a power "in a nonfiduciary capacity .
Revocable trusts are probably the most common type of trust, and they are all grantor trusts
by virtue of that retained power.
For several years, there have been questions about the gift and estate tax consequences of the payment and reimbursement of the income tax liability arising from a grantor trust
WITH MANY OF THE ESOPs CREATED OVER the past 20 years suffering the pains of old age, ESOP sponsors must carefully consider some of the possible courses of action available to them, including reloads, refinancings, grantor trusts
and even possible plan terminations.
The general rule is that all grantor trusts
must file a Form 1041, which contains only the trust's name, address, and tax identification number (TIN) (see Regs.