Estate and Trust Administration — Tax Planning (Portfolio 855)

Description

Bloomberg Tax Portfolio, Estate and Trust Administration — Tax Planning, No. 855, discusses aspects of tax planning in connection with the administration of an estate or trust. This Portfolio includes, but is not limited to, the subject of after-death tax planning.

In administering an estate or trust, the fiduciary has numerous options affecting taxes. These options are analyzed from the standpoint of the income, estate, gift, and generation-skipping transfer tax laws. Options that must be considered by a fiduciary include: (1) splitting gifts, (2) claiming administration expenses as income expenses, (3) using the entity as a separate taxpayer, (4) disclaimers, and (5) options relating to interests in partnerships and corporations. Various elections available in the administration of an estate also are discussed.

The timing and type of distributions from an estate or trust can affect the income tax consequences of both the estate or trust and its beneficiaries. The fiduciary can distribute income currently or retain it, thereby using the estate or trust as a separate taxpayer. The fiduciary can also time distributions to make use of deductions. In distributing property in kind, the estate or trust can elect to recognize the gain or loss.

Many of the post-mortem estate planning options discussed in this Portfolio cannot be used by unilateral action of the executor; the cooperation (or at least the consent) of others is required. In addition, the executor must often take timely action to take advantage of a given option. On the other hand, many elections, once made, are irrevocable or difficult to revoke. Thus, the task of post-mortem tax planning is one of the most challenging areas of tax practice.

This Portfolio may be cited as Acker, 855 T.M., Estate and Trust Administration — Tax Planning.

Table of Contents

I. Introduction
II. Options Affecting the Decedent’s Income Taxes
III. Options Affecting the Decedent’s Gift Taxes
IV. Option to Treat Revocable Trust as Part of Estate
V. Options Affecting the Decedent’s Gross Estate
VI. Options Affecting the Decedent’s Taxable Estate
VII. Options Affecting the Decedent’s Estate Tax Payments
VIII. Options Affecting the Decedent’s GST Exemption
IX. Options Available to Beneficiaries Affecting the Disposition of the Decedent’s Estate
X. Options Affecting Fiduciary Income Taxes
XI. Options Involving Business Interests
XII. Options Involving Interests in Employee Benefits