Tax Notes Article, "IRS rules on estate, gift, GST tax consequences of proposed early distribution of trust principal"

The IRS, in a recent Revenue Ruling, addressing the proposed early distribution of trust principal to the remainder beneficiaries of a trust, has ruled that the trust won't recognize any gain as a result of the early distribution, that the trust will retain its generation-skipping transfer tax exempt status after the distribution, and that the primary beneficiary will make a gift of her interest in the portion of the early distribution of the trust principal to the remainder beneficiaries.

2011 TNT 108-34

PLR-137809-10

Posted by Adam Fleischer, Associate Editor, Wealth Strategies Journal