QTIP's tax benefits increased by sale of remainder interest

Article Abstract:

The tax benefits of a qualified terminable interest property (QTIP) can be increased if the surviving spouse purchases both the present and future remainder interests because the trust can then be collapsed. However, there are no tax laws governing such a planning effort and so tax treatment is indefinite, creating some risk. Based on common law trust principles, the QTIP trust could be collapsed after the purchase thus removing the assets from IRC section 2044 inclusion in the surviving spouse's estate, avoiding estate taxes while maintaining QTIP benefits for gift taxes.

Methods, Estate planning

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Strategies for handling difficult fiduciary income tax issues

Article Abstract:

Fiduciaries of trusts and pass-through business entities should carefully review tax issues so that tax returns are properly executed. Fiduciary accounting of items of income, loss, or distributions may differ from income tax accounting due to state law. Early consideration of these issues is also important for instituting the most advantageous tax planning strategies. Special tax accounting rules apply in estate or trust termination years which may best be approached beginning in prior tax years.

Tax Administration, States, Analysis, Management, Tax accounting, Fiduciary duties

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Revisiting purchases of remainder interests in QTIP trusts

Article Abstract:

The author includes IRS guidance and case law in this discussion of the tax treatment of sales of QTIP (qualified terminable interest property) trust remainder interests.

Tax Law, Taxation, Remainders (Estates)

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