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Income Taxation of Fiduciaries and Beneficiaries (2012)

Income Taxation of Fiduciaries and Beneficiaries (2012)

Author: Byrle M. Abbin
Publisher: CCH U.S.
ISBN: 9780808029878
Published In: June 2012
Format: Paperback , 2232 pages
Jurisdiction: U.S. ? Disclaimer:
Countri(es) stated herein are used as reference only

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Income Taxation of Fiduciaries and Beneficiaries provides step-by-step guidance on the taxation of fiduciary income. This comprehensive guide for practitioners advising fiduciaries and beneficiaries in federal income tax matters covers the broad range of complex issues from charitable remainder trusts to nexus rules and their effect. Providing expert practical advice, Income Taxation of Fiduciaries and Beneficiaries helps the practitioner obtain the most advantageous outcomes for his/her fiduciary and beneficiary clients. Key feature: 35 case studies with filled-in forms 1041 and accompanying documents.

Highlights of the 2012 Edition include:

Hiring Incentives to Restore Employment (HIRE) Act of 2010: foreign trust rules tightened concerning:

Who is a U.S. beneficiary of a foreign trust;
Expansion of information reporting requirements;
Loans of trust assets considered to be distributions;
Penalty applications and rates/amounts for inadequate return and /or information reporting.

Increased use of “decanting” trusts—distribution of part or all of trust assets to another trust(s)—income tax treatment is stated

The transfer does not bring distribution and related subchapter J rules into effect;
Certain aspects, such as how to treat estimated payments by the original trust, are uncertain.

CRTs

Not qualified if remainder interest guarantees annuity payments to individual donor;
Return of excess distribution results in trust qualification continuing;
Reformation for scrivener’s error accepted;
Rescission ab initio, when 10% test was not met at creation and trust is bankrupt.

How to determine amount and/or allocation of DNI in special circumstances

Switching status [conversion] from grantor to nongrantor and vice versa does not generate income;
Sequential beneficial interests are not separate shares;
Tax basis and depreciation calculation involving contributed assets;
DNI is determined on full tax year [usually calendar] basis—no interim cutoffs;
Determining DNI in year of death of a beneficiary;
Simple trust status may be turned on and off, if facts so indicate.

The IRS continues to use narrow definition of what is an active activity for trust owned entity interests.
Source of payment to charity in effecting a “look back” election in second year is irrelevant.

Volume 1:

1. Overview of the Fiduciary Entity
2. The Fiduciary (Trust) Accounting Concept; Total Return Investment Philosophy
3. Principles of Federal Income Tax for Fiduciaries
4. Itemized Deductions
5. Distributions
6. Capital Gains and Alternative Minimum Taxes, Accounting Periods and Special Rules
7. Estimated Taxes
8. Passive Activity Loss Limitations
9. Trusts: Formation to Termination
10. Charitable Remainder Trusts
11. Charitable Lead Trusts
12. Alternative Use of Grantor Trusts in Transactional Planning
13. Ownership of S Corporation Stock by Trusts--Emphasizing Qualified Subchapter S Trusts and the New More Flexible Electing Small Business Trust
14. Grantor Trust Rules
15. Foreign Trusts Treated as Grantor Trusts

Volume 2

16.Estates: Formation to Termination
17 Income Tax Aspects of Fiduciary Ownership and Administration of Family Limited Partnership (FLP) Interests
18 Income Tax Aspects of Generation-Skipping Transfers
19 State Taxation of Fiduciaries and Beneficiaries
20 Special Commercial Trusts
21 IRS Ruling Policy and Audits; Responsibility for Filing and Payment of Tax
22 Foreign Trusts and Estates

Case Studies-Completed Tax and Information Returns
Glossary of Fiduciary Terms
Table of Cases
Table of Statutes
Table of Internal Revenue Code Sections
Table of Treasury Regulations
Table of Treasury Rulings
Index

Byrle M. Abbin is a Managing Director, WTAS, LLC in McLean, Virginia. He received his B.B.A. with distinction from the University of Michigan and his J.D. from Harvard Law School.

He has extensive experience in tax policy matters through congressional testimony, written analyses in tax journals, and is a member of various committees of the American Institute of Certified Public Accountants (AICPA) that have proposed legislative and regulatory recommendations. In this role, Mr. Abbin has appeared before the World Economic Forum, Davos, Switzerland, and various meetings including the Brookings Institution Conference on Tax Policy. His technical interests range from estate planning to the corporate alternative minimum tax, about which he edited and co-authored a treatise published by CCH.

He has been a prolific speaker and writer in estatet planning matters, appearing before most major tax institutes and conferences. He has been especially involved in the ALI-ABA program on planning for Large Estates and in the University of Miami’s Philip E. Heckerling Institute on Estate Planning, on whose advisory committee he serves. He is a former Director of the American Council for Capital Formation, The Tax Council,and a former Director and Chairman of the Institute for Research on the Economics of Taxation. He served as Chairman of the AICPA Consumption Taxation Task Force. He is also a member of the AICPA Fiduciary Income Tax Task Force and serves on the AICPA Transfer Tax Task Force and GST Tax Task Force. He is a member of the program and policy committee of the Tax Foundation, and the Advisory Board of numerous tax journals.

In 2001, the American Institute of Certified Public Accountants bestowed on Mr. Abbin the Arthur J. Dixon Award, the accounting profession’s highest award for tax service in a career of service with distinction in the field of taxation. In 2004, as part of the initial group of practitioners selected for the designation, the National Association of Estate Planners & Councils awarded him the status of Distinguished Accredited Estate Planner for his contribution to the promotion of estate planning expertise nationally. In 2008, the NAEPC presented him with the Hartman Axley Lifetime Service Award in recognition of distinguished service to the estate planning profession.