Income from partnerships was UBTI, causing taxation of CRUT income

Article Abstract:

The Tax Court ruling in 'Leila G Newhall Unitrust,' upheld by the Ninth Circuit, underscores the need for trusts to avoid unrelated business taxable income (UBTI). Section 664(c) subjects charitable remainder unitrusts (CRUTs) to taxation on all their income, even if some would ordinarily be tax-free, if any income is UBTI. The situation arose when a company in which the trust held common stock transferred its assets to three new partnerships and converted outstanding shares to depositary receipts.

Partnerships, Educational, religious, etc. trusts, Educational, Religious, Charitable Trusts, Grantmaking Foundations, Taxation, Partnership, Charitable trusts, Charitable remainder trusts, Unrelated business income tax

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Verbal disclaimer was held not valid

Article Abstract:

An oral statement that a beneficiary intended to renounce interest in a spouse's estate does not constitute a valid disclaimer. The US district court for Louisiana ruled that a woman who told the attorneys representing her husband's estate that she planned to renounce interest in his estate, but did not execute a written disclaimer, was not entitled to a tax refund. Estate planners should encourage their clients to plan for all eventualities.

Estate Planning, Laws, regulations and rules, Estate tax, Estate taxes, Louisiana, Wills, Renunciation of inheritance

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