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Tax Law Update 2008-08-01 (1)Tax Law Update 2008-08-01 (1)
Provisions regarding tax character of distributions to charity must have a non-tax economic effect. The Treasury Department has issued proposed regulations (NPRM REG-101258-08, June 18, 2008) under Internal Revenue Code Sections 642(c) and 643 regarding the tax consequences of an ordering provision in a trust, will or local law that attempts to determine the tax character of amounts paid by a trust
August 1, 2008
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP
Provisions regarding tax character of distributions to charity must have a non-tax economic effect. The Treasury Department has issued proposed regulations (NPRM REG-101258-08, June 18, 2008) under Internal Revenue Code Sections 642(c) and 643 regarding the tax consequences of an ordering provision in a trust, will or local law that attempts to determine the tax character of amounts paid by a trust or estate to a charitable beneficiary.
An estate or trust receives an unlimited income tax deduction under IRC Section 642(c) for charitable contributions made pursuant to the terms of the governing instrument. When determining whether an amount paid to a charitable benefici...
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