It was held under cotenancy agreements which were placed in Grantor Retained Income Trusts (GRITs).
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However, in the grantor trust version, the grantor pays the taxes on the income.
The IRS blesses the indirect gift--the payment of income taxes--from the grantor to the trust.
Whatever the bonus, I hope it works for the grantor as well as for the grantees.
And, for now, short term GRATs, grantor trusts and other valuable planning techniques remain at your disposal.
The grantor therefore gains a degree of tax relief, while the assets are transferred to the trust.
Let us say that you are the grantor, meaning you have the bucks and you create the trust.
An augmented personal balance sheet depicts pledges as a liability with the same force on the grantor as any other debt.
So-called grantor-retained annuity trusts, or GRATs, let people give a portion of an asset's future profits to heirs tax-free.
Here the grantor must survive the term of the GRAT for the asset to be excluded from his estate.
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Currency ETFs - Most currency ETFs are in the form of grantor trusts.
Returns are prepared as if the grantor did everything that the trust did.
Transactions between the grantor and the trust are ignored for income tax purposes.
There are proposals to restrict a number of estate planning tools, including grantor retained annuity trusts and family limited partnerships.
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At current interest rates, says Springfield, Ill. charitable planner Vaughn W. Henry, grantor CLATs work for a surprising variety of donors.
Using such trusts a grantor (parent) can pay income tax on trust income accumulating for the benefit of children and descendants.
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Defective grantor trust is a really stupid name for something that, in the right circumstances, can be a very good idea.
But they insist they were allowed by the rules that grantor A.N.
Provided you do it right, you can chop your family's gift and estate taxes using family limited partnerships and grantor-retained annuity trusts.
With a GRAT, a grantor puts assets into a trust and takes back an annuity payout for typically two to three years.
It would be, but for one thing: The income tax people at the IRS disregard transactions between a taxpayer and a grantor trust.
In addition, low interest rates make this an ideal time to use such vehicles as grantor retained annuity trusts and charitable lead trusts.
Opening a new bank account for her husband elsewhere would require executing a new document, a near impossible task when the grantor is incompetent.
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For this purpose, it is not necessary to use some exotic trust structure or obscure jurisdiction, but a well-drafted irrevocable grantor trust should usually suffice.
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Require a 10-year minimum term for grantor retained annuity trusts (GRATs).
The Treasury Department has proposed clamping down on future grantor trusts.
If you are heading to an estate planner for the first time you now know everything that you need to know about defective grantor trusts.
"Defective grantor trusts, " another estate-planning technique, don't have new limits, either.
An entrepreneur or "grantor" gives an asset (usually founder's or pre-public offering stock) to a trust for his kids and takes back an annuity for himself.
That is, from an income tax perspective, income, deductions and credits at the trust level are captured on the personal income tax return of the grantor.
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