TAX UPDATETAX UPDATE
From David Handler, in the Chicago office of Kirkland & Ellis LLP, we have this update, including his report on the Revenue Ruling that has the estate-planning world buzzing 2004-64: Grantor trusts do not cause taxable gifts and discretionary income tax reimbursements will not cause estate inclusion. In Revenue Ruling 2004-64, issued July 6, the Internal Revenue Service held that when a grantor of
August 1, 2004
Rorie M. Sherman Editor in Chief
From David Handler, in the Chicago office of Kirkland & Ellis LLP, we have this update, including his report on the Revenue Ruling that has the estate-planning world buzzing — 2004-64:
Grantor trusts do not cause taxable gifts and discretionary income tax reimbursements will not cause estate inclusion. In Revenue Ruling 2004-64, issued July 6, the Internal Revenue Service held that when a grantor of a “grantor trust” (that is, a trust where a grantor is treated as the owner of the trust property for income tax purposes) pays the income tax attributable to the trust's income, the grantor won't be treated as having made a gift to the beneficiaries. In addition, if a trust agreement or applicable local law all...
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