First, a portion of the policies was transferred between grantor trusts
as to the husband.
Hesch, Deferred Payment Sales to Grantor Trusts
, GRATs and Net Gifts: Income and Transfer Tax Elements, 24 Tax MgMT.
Nevertheless, it may be possible for a knowledgeable tax adviser to solve this problem if he or she knows the intricacies of the grantor trust
rules of IRC [section][section] 671-677.
If Grantor G owns 2 grantor trusts
and transfers a life policy from 1 trust to the other in exchange for cash, "there has been no transfer of the contract within the meaning of Section 101(a)(2)," Lieu writes.
are permitted to use the grantor's Social Security number (SSN) as their TIN [Treasury Regulations section 1.
163-5T(d)(l) is not limited solely to equity interests issued by grantor trusts
However, through the use of grantor trusts
, the income tax burden on the assets gifted to the junior family members can remain the responsibility of the senior family member, providing an additional transfer tax benefit.
However, because the grantor retains certain other powers, the trust, although irrevocable, is treated as a grantor trust
for income tax purposes.
In each ruling, the IRS concluded that the irrevocable trusts were not grantor trusts
, and at the same time, the transfers of cash and property to the trusts by the grantor would be incomplete gifts.
Revenue Ruling 2004-64 may present a problem for grantor trusts
because of state laws.
To solve these problems, ESOP sponsors must carefully consider possible corrective action--including reloads, refinancings, grantor trusts
(and even possible plan terminations) as well as tax and accounting changes--to arrive at a solution that best serves the company and participants, all while complying with ERISA and the IRC.
This item also addresses concerns some people have expressed about using these alternatives, particularly with irrevocable grantor trusts
(where the trust assets are not includible in the grantor's taxable estate).
taxpayer has transferred property are treated as grantor trusts
as long as the U.
Because the grantor's spouse is eligible to receive distributions of income or principal at the discretion of the trustee(s), these will be considered grantor trusts
, provided the trustee(s) is not an adverse party under IRC Sec.
83-75, both involving taxable trusts that were not grantor trusts
, and Rev.