The IRS has issued five rulings regarding a proposed transfer of assets from a trust, which is exempt from the generation-skipping tax, to a substantially similar trust.
Regarding the proposed transfer of assets, the IRS ruled that:
(1) the Receiving Trust would not lose its zero inclusion ration for generation-skipping tax purposes;
(2) a beneficiary's power to remove and replace special trustees are not general powers of appointment under sections 2041 and 2514;
(3) the transfer of assets to the Receiving Trust would not result in transfers of any beneficial interest that is subject to tax under section 2501;
(4) neither the beneficiaries nor the trusts would recognize gain or loss under section 61 or section 1001; and
(5) the holding period of the receiving trust in the assets transferred from Trust 1 will include the holding period of Trust 1 for each asset.
See PLR 201134017 (August 26, 2011).
Posted by Brian Spring, Associate Editor, Wealth Strategies Journal.
Regarding the proposed transfer of assets, the IRS ruled that:
(1) the Receiving Trust would not lose its zero inclusion ration for generation-skipping tax purposes;
(2) a beneficiary's power to remove and replace special trustees are not general powers of appointment under sections 2041 and 2514;
(3) the transfer of assets to the Receiving Trust would not result in transfers of any beneficial interest that is subject to tax under section 2501;
(4) neither the beneficiaries nor the trusts would recognize gain or loss under section 61 or section 1001; and
(5) the holding period of the receiving trust in the assets transferred from Trust 1 will include the holding period of Trust 1 for each asset.
See PLR 201134017 (August 26, 2011).
Posted by Brian Spring, Associate Editor, Wealth Strategies Journal.
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