One aspect of the new rules may come as a big surprise

The definition of foreign trust under new Internal Revenue Code (IRC) Sections 7701(a)(30) and (31)(B) may cause unexpected tax consequences. A trust that was created by a US individual and that has at least one US beneficiary will become a grantor trust under IRC Section 679 if the trust becomes a...

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Bibliographic Details
Published inABA trust letter no. 376; p. 12
Main Author Morris, Donald C
Format Journal Article
LanguageEnglish
Published Washington American Bankers Association 01.03.1997
Subjects
Excise taxes
Foreign trusts
Grantor trusts
Tax regulations
Trust departments
United States > US
Online AccessGet full text
ISSN1524-4210

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Summary:The definition of foreign trust under new Internal Revenue Code (IRC) Sections 7701(a)(30) and (31)(B) may cause unexpected tax consequences. A trust that was created by a US individual and that has at least one US beneficiary will become a grantor trust under IRC Section 679 if the trust becomes a foreign trust under the new definition and the US transferor is still living. New Code Section 679(a)(5) provides that, if a US individual transferred property to a domestic trust and the trust becomes a foreign trust while the individual is still living, the general rules of Section 679 will apply as if the transfer occurred on the date the trust became a foreign trust.
ISSN:1524-4210