In a private letter ruling, the IRS decided a number of issues relating to the conversion of a non-grantor trust to a grantor trust. The taxpayer proffered a number of questions: 1) whether such a transfer was taxable, 2) if the transfer would be considered self-dealing, and 3) if the transfer would result in a charitable deduction. The IRS ruled that the conversion was not a taxable property transfer, was not self-dealing, and that it would not result in a charitable deduction for the grantor.
See Mary Ellen Meara, Conversion of Non-grantor Trust To Grantor Trust Not Taxable, Withum, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
