■ Grantor Retained Interests: Proposed revisions to Reg. 20.2036-1 (found in REG-119532-08 ) provide a method to determine the portion of trust corpus includible in a deceased grantor’s estate if the grantor reserves a graduated retained interest, which is a retained interest that increases annually during the term of the trust. The proposed method…
■ Alternate Valuation: An estate is allowed, in very general terms, to value estate assets 6 months after death. With asset values declining this can be important. Consider making a protective Code Section 2032 election as a hedge against IRS valuation attacks. The executor can check the box on Form 706 indicating “Yes” for…
Summary: If a trust is treated as owned by the person setting it up (the “grantor”) for income tax purposes, many beautiful things follow. The grantor can pay the income tax on the trust earnings thereby leveraging the growth of trust assets, typically outside the grantor’s estate. The trust can transfer appreciated assets to…
Summary: When you die the estate tax is assessed on the value of the assets you owned on the date of your death. In case you haven’t noticed, asset values have been declining lately. If your estate were taxed on the date of death values, nine months later when the tax is paid, the…