IRS Issued Five Rulings Regarding Gift, Income, and Generation-Skipping Tax Consequences When Transferring Trust Assets

Brian Spring (Associate Editor, Wealth Strategies Journal) recently posted on the five rulings the IRS issued in PLR 201134017. The post is below, in full:

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 Brian Spring (Associate Editor, Wealth Strategies Journal) PLR 201134017 on Income, Gift, and Generation-Skipping Tax Consequences of Trust Asset Transfers, Aug. 29, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.