Private Letter Ruling 200949012Private Letter Ruling 200949012
The IRS rules that the beneficiary of a trust will be treated as the owner thereof under Internal Revenue Code Section 678 In PLR 200949012 (Dec. 7, 2009), a trust was established that wasn't by the grantor under IRC Sections 671 through 677. The beneficiary had two withdrawal rights over the trust: (1) to withdraw or direct the net income or principal to be paid to him for his health, education,
January 1, 2011
The IRS rules that the beneficiary of a trust will be treated as the owner thereof under Internal Revenue Code Section 678
In PLR 200949012 (Dec. 7, 2009), a trust was established that wasn't “owned” by the grantor under IRC Sections 671 through 677. The beneficiary had two withdrawal rights over the trust: (1) to withdraw or direct the net income or principal to be paid to him for his health, education, maintenance or support (HEMS), and (2) a Crummey right to withdraw the full amount of any property transferred to the trust, which lapsed each year in an amount equal to the greater of $z or y percent of the value of the trust corpus (presumably $5,000 or 5 percent, the “5 and 5 amount”).
The IRS ruled that the beneficiary would be treated...
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