Cash basis liquidating distributions

09 Feb

You will grow the value of those assets outside your estate, you’ll pay the income tax on trust income reducing your estate, and your estate will be reduced by interest charges. What if the securities the trust invests in with the fund borrowed plummet in value?

The Practical Planner is a bi-monthly electronic (or if you prefer, paper) sophisticated planning newsletter that provides practical and creative ideas to address estate, tax, business, personal, financial, and asset protection planning.

Articles address current developments, new planning ideas, and topics the media may not have addressed.

The latest salvo will be regulations negating discounts on FLPs/LLCs (perhaps only on those not operating an active business) what should you be doing? If discounts are nixed and your estate is under the federal exemption amount, you might do a happy jig! Because the IRS will have done most wealthy, but not ultra-wealthy, taxpayers a favor.

You may have created an FLP or LLC to achieve valuation discounts.

Domestic asset protection trusts (“DAPTs”) are trusts that you set up (you’re the settlor) but you are a beneficiary of, called “self-settled” trusts.Although there have been a number of court cases suggesting that self-settled trusts might not work, the facts on all of those cases have been pretty ugly.Other states permit self-settled-like trusts (you can set up a marital trust for your spouse and on his or her demise the assets come flow into a credit shelter trust that you are a beneficiary of).All told there is a significant number of states that permit self-settled trusts.