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When Foreign Trusts Are Non-GrantorWhen Foreign Trusts Are Non-Grantor

It's essential that practitioners know not only the fundamentals of U.S. federal income taxation of foreign non-grantor trusts and their beneficiaries, but also the ways to plan around the throwback tax that's imposed on distributions of accumulated income to the U.S. beneficiaries of these trusts. Of course, if you can't avoid the throwback tax, you're going to have to know how to calculate it. And

Amy P. Jetel, Partner

April 1, 2008

36 Min Read
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Amy P. Jetel

It's essential that practitioners know not only the fundamentals of U.S. federal income taxation of foreign non-grantor trusts and their beneficiaries, but also the ways to plan around the “throwback tax” that's imposed on distributions of accumulated income to the U.S. beneficiaries of these trusts. Of course, if you can't avoid the throwback tax, you're going to have to know how to calculate it. And advisors must be aware of the U.S. tax reporting requirements related to foreign non-grantor trusts.

The Rules

If a trust is classified as a non-grantor trust, it's a separate taxpayer that falls under the taxation regime of Subchapter J of the Internal Revenue Code. (These rules contrast to those applicable to a “grantor trust,” ...

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About the Author

Amy P. Jetel

Partner, Beckett Tackett Jetel

http://www.btjlaw.com/

Amy P. Jetel focuses her practice on the design, implementation, and administration of outbound and inbound foreign trust and entity structures to meet the estate-planning and asset-protection goals of multi-jurisdictional clients.  In this practice, she has gained a depth of experience in the U.S. tax and compliance aspects of non-U.S. trusts and entities, and she frequently addresses complex international tax and treaty issues faced by individuals with ties to multiple jurisdictions.  Ms. Jetel has developed a niche practice in planning around the throwback-tax regime that applies to foreign non-grantor trusts, and in representing clients before the Internal Revenue Service to bring previously unreported foreign structures into full compliance.  Ms. Jetel also practices in the areas of traditional estate and disability planning, probate and estate administration, and entity formation and governance.  She is a frequent author and speaker in the areas of estate planning, asset protection, and international taxation and compliance.  Ms. Jetelis a veteran of the U.S. Navy.